Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

The aggregate market value of the shares of common stock held by non-affiliates of the registrant, computed by reference to the closing price as reported on the New York Stock Exchange, as of June 30, 2015, the last day of the registrant’s most recently completed second fiscal quarter, was approximately $18.3 billion.

As of February 12, 2016, there were 186,454,092 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Annual Report on Form 10-K incorporates by reference portions of the registrant’s Proxy Statement for its 2016 Annual Meeting of Stockholders, which Proxy Statement will be filed with the United States Securities and Exchange Commission within 120 days after the end of the registrant’s 2015 fiscal year.

In this Annual Report on Form 10-K, we refer to Mead Johnson Nutrition Company and its subsidiaries as “the Company,” “MJN,” “Mead Johnson,” “we” or “us.”

Our Company

Mead Johnson Nutrition Company is a global leader in pediatric nutrition with approximately $4.1 billion in net sales for the year ended December 31, 2015. We are committed to being the world’s leading nutrition company for infants and children and to helping nourish the world’s children for the best start in life. Our Enfa family of brands, including Enfamil infant formula, is the world’s leading brand franchise in pediatric nutrition, based on retail sales, and accounted for approximately 80% of our net sales for the year ended December 31, 2015. Our comprehensive product portfolio addresses a broad range of nutritional needs for infants, children and expectant and nursing mothers. We have over 100 years of innovation experience during which we have developed or improved many breakthrough or category-defining products across our product portfolio. Our singular focus on pediatric nutrition and our implementation of a business model that integrates nutritional science with health care and consumer marketing expertise differentiate us from many of our competitors.

We market our portfolio of more than 70 products to mothers, health care professionals and retailers in more than 50 countries in Asia, North America, Latin America and Europe. Our three reportable segments are Asia, North America/Europe and Latin America, which comprised 50%, 31% and 19%, respectively, of our net sales for the year ended December 31, 2015. See “Item 8. Financial Statements – Note 5. Segment Information” for additional financial information by segment and geographical area. For the year ended December 31, 2015, 73% of our net sales were generated outside of the United States.

We believe parents and health care professionals associate the Mead Johnson name and our Enfa family of brands with quality, science-based pediatric nutrition products. Our products are marketed around the world through our global sales and marketing efforts. We believe that the strength of our brands allows us to create and maintain consumer loyalty across our product portfolio.

Our History

Mead Johnson was founded in 1905 and introduced Dextri-Maltose, our first infant feeding product, in 1911. Over the next several decades, we built upon our leadership in science-based nutrition, introducing many innovative infant feeding products while expanding into vitamins, pharmaceutical products and children’s nutrition. Some of our products, developed in cooperation with clinicians and leading nutrition researchers, established a partnership between Mead Johnson and the scientific community that continues to this day. During the course of our history, we expanded our operations into extensive geographies outside of the United States and now focus solely on pediatric nutrition. Throughout our history, our deeply-held commitments to support good nutrition early in life and to improve the health and development of infants and children around the world have been hallmarks of our organization.

In 1967, we became a wholly-owned subsidiary of Bristol-Myers Squibb Company (“BMS”). In February 2009, we completed our initial public offering of common stock, following which BMS retained a significant ownership interest in the Company. BMS then completed a split-off of its remaining interest in Mead Johnson in December 2009 making Mead Johnson an independent public company. The Company is currently headquartered near Chicago, Illinois.

Our Product Portfolio

Our product portfolio, which addresses a wide range of pediatric nutritional needs, consists of two principal product categories: infant formula and children’s nutrition, which represented 59% and 39%, respectively, of our net sales for the year ended December 31, 2015. Our product categories can be separated into the following five general product types: (i) routine infant, (ii) solutions, (iii) specialty, (iv) children’s nutrition and (v) other. Our routine infant formula is intended for healthy consumers while our solutions and specialty products are offered for infants with common feeding problems and special nutritional needs. Our children’s nutrition products are designed to meet the nutritional needs of children at different stages of development. Our other products (representing approximately 2% of net sales) include vitamins and supplements. We market products under different names in various regions across the world based on marketing strategies and brand recognition.

Routine Infant Formula.We design routine infant formula for healthy, full-term infants without special nutritional needs both for the use as the infant’s sole source of nutrition and as a supplement to breastfeeding. We endeavor to develop routine infant formula as close as possible to breast milk. Each product is referred to as a “formula,” as it is formulated for the specific nutritional needs of an infant at a given age. Generally, our routine infant formulas have the following four main components: (1) protein from cow’s milk that is processed to have a profile similar to human milk, (2) a blend of vegetable fats (including docosahexaenoic acid (“DHA”) and arachidonic acid (“ARA “)) to replace bovine milk fat in order to better resemble the composition of human milk, (3) a carbohydrate, generally lactose from cow’s milk and (4) a vitamin and mineral “micronutrient” pre-mix that is blended into the

1

product to meet the specific needs of the infant at a given age. Our key routine infant formula products include Enfamil Premium, Enfapro Premium, Enfalac A+ and Enfamil A+. Our products are available in a powdered mix form globally and in a ready-to-drink liquid form in certain regions. In addition, we have recently introduced non-GMO Enfamil formulas (newborn and infant) in an effort to provide parents with options that meet a variety of preferences.

Specialty Products.We design specialty formulas to address certain conditions or special medical needs, including Nutramigen (for cow’s milk protein allergies) and Puramino (an amino acid formula for severe cow’s milk protein allergies or multiple other food allergies). We design products such as Enfamil Premature to meet the unique needs of premature and low birth weight infants under the supervision of a doctor, most often in the hospital, and EnfaCare, a hypercaloric formula for premature babies at home. We also produce medical foods, or foods for special medical purposes, for nutritional management of individuals with rare, inborn errors of metabolism such as maple syrup urine disease (Mead Johnson BCAD) and phenylketonuria (Mead Johnson Phenyl-Free). Certain of these products are intended for infants and young children while others are suitable for children and adults.

Children’s Nutrition Products. We design our children’s products to meet the changing nutritional needs of children at different stages of development (i.e. toddlers and older children). Our primary children’s nutrition products include Enfagrow, Sustagen and Lactum. These products are not breast milk substitutes and are not designed as a sole source of nutrition but instead are designed to be a part of a child’s appropriate diet. We also offer “milk modifiers” (ChocoMilk and Cal-C-Tose) that, when added to a glass of milk, enhance the milk’s nutritional value.

Other Products. We also produce a range of other products, including pre-natal and post-natal nutritional supplements for expectant and nursing mothers, including Expecta and EnfaMama. Our pediatric vitamin products sold in some geographies, such as Enfamil Poly-Vi-Sol, provide a range of benefits for infants, including multivitamins and iron supplements.

The following table shows sales for each of the above-described product types as a percentage of our total net sales over each of the past three fiscal years.

% of Total Net Sales

2015

2014

2013

Routine Infant Formula

37

%

38

%

41

%

Solutions Products*

13

%

11

%

10

%

Specialty Products*

9

%

8

%

8

%

Total Infant

59

%

57

%

59

%

Children’s Nutrition Products

39

%

41

%

39

%

Total Children’s

39

%

41

%

39

%

Other

2

%

2%

2

%

Total Other

2

%

2%

2

%

* These products can be consumed by children; however, a majority of such products are consumed by infants.

Sales and Marketing

We conduct regional marketing within a strategic framework focused on both parents and health care professionals in accordance with country-specific regulatory requirements. We maintain both a health care professional sales force and a retail sales organization throughout the world. Our marketing activities vary from region to region depending on our market position, consumer trends and the regulatory environment. Our marketing teams seek to anticipate market and consumer trends, and attempt to capture consumer insights to determine strategy for brand communication, product innovation and demand-creation programs. The marketing teams work with external agencies to create marketing campaigns for consumers, health care professionals and retail sales organizations, where permitted.

Consumers. Parental preference plays an important role in brand selection. We participate in a variety of evidence-based marketing activities that emphasize our superior nutritional science. We have invested significant resources to support the trend in

2

consumer preference for premium products in key markets, and we are developing new technology platforms to better support e-commerce and mobile commerce. In particular, we have invested in targeted digital marketing programs that allow us to attract new or prospective parents’ attention online, engage with potential consumers by connecting them to relevant content reflective of their needs and then provide targeted, specific information and product offers.

Health Care Professionals. Our sales force educates health care professionals about the benefits of our infant formula products in each of the countries where we market our infant formula products. We focus our product detailing efforts on neonatal intensive care units, physicians and other health care professionals, hospital group purchasing organizations and other integrated buying organizations. We also support health care professionals by organizing continuing medical education programs, symposia and other educational interfaces.

Retail Sales Organization. Our sales force markets our products to each of the retail channels where our products are purchased by consumers, including mass merchandisers, club stores, baby stores, grocery stores, drug stores and, to a limited extent, convenience stores. The size, role and purpose of our retail sales organization varies significantly from country to country depending on our market position, the consolidation of the retail trade, shopper trends and the regulatory environment. In North America, Latin America and Asia, we focus on all retail channels, while in Europe we focus primarily on specialty products sold through pharmacies.

Global Supply Chain

We manage sourcing, manufacturing and distribution through our global supply chain. We currently operate in-house production facilities at nine different locations around the world and additionally use third-party manufacturers for a portion of our requirements.

Locations. Our manufacturing and finishing facilities are located in the United States, the Netherlands, Mexico, Brazil, Singapore, Thailand, China and the Philippines. See “Item 2. Properties” for a description of our global manufacturing facilities. We also use third-party manufacturers for select production requirements. As the production process advances, regional or sub-regional teams support the global team, overseeing manufacturing activities such as the finishing of our products. Our four regional quality departments located in Singapore, the Netherlands (Nijmegen), the United States (Evansville) and Mexico (Mexico City) perform regional and manufacturing site quality control and assurance. The Quality Assurance work in the regions is supported by a Global Quality Assurance group which provides additional expertise for specific areas.

Suppliers. We source approximately 75% of our materials from approximately 50 suppliers. Through these suppliers, we obtain key raw materials and primary packaging materials on a global basis. These raw materials are subject to review and approval by our regional teams to ensure compliance with regulatory requirements and quality standards. Certain raw materials, while managed and contracted on a global basis, are subject to regional and local variations in price under the terms of these supply agreements. For example, the cost of dairy, agricultural oils, and packaging materials are affected by global commodity changes. As such, we are often exposed to price volatility related to market conditions outside of our control. Dairy products, consisting primarily of milk powders, non-fat dry milk, lactose and whey protein concentrates, accounted for approximately 43% of our global expenditures for raw materials and approximately 29% of our cost of goods sold for the year ended December 31, 2015.

Quality Standards. Our products undergo extensive quality and safety checks throughout the manufacturing process, from raw materials to finished product. As noted above, we have four regional quality departments which perform routine manufacturing site inspections, focused on regulatory requirements, food safety, continuous quality improvement, ingredient supplier quality and third-party compliance. Our products meet all local and nationally required regulatory, safety and nutrition requirements, meaning Codex standards where applicable, the U.S. Infant Formula Act in the United States and specific national, local and regional requirements elsewhere (See “ – Regulatory” below). Nevertheless, the Company is constantly driving improvement in quality and, as such, these regulations are seen as the minimum requirements; our internal rigorous standards and quality ambition meet and usually exceed such requirements.

Distribution. We manage our distribution networks locally with regional oversight. We generally enter into distribution agreements with third-party logistics providers and distributors and maintain a small staff at the local or regional level to track performance and implement initiatives.

Customers

Our products are sold principally to distributors and retail customers, both nationally and internationally. Sales to two of our customers, DKSH International Ltd., a distributor serving primarily Asia (including sales to its regional affiliates), and Wal-Mart Stores, Inc. (including sales to Sam’s Club), accounted for approximately 14%, 16% and 16%, and approximately 12%, 11% and 10%, of our gross sales for the years ended December 31, 2015, 2014, and 2013, respectively.

3

Research and Development

Investing in research and development (“R&D”) capabilities and projects is an important part of our business. Our R&D organization consists of professionals, many of who have extensive industry experience and advanced educational backgrounds. Our global R&D centers are located in the United States, Mexico, Thailand, China, the Netherlands and Singapore. Our four Pediatric Nutrition Institutes (“PNI”) are located in Evansville, Indiana (United States); Mexico City, Mexico; Guangzhou, China; and Singapore.

We organize our R&D on a global basis because our science-based products address nutritional needs that are broadly common around the world. We then rely on our regional R&D teams to incorporate any geographic-specific consumer behaviors and preferences. This is especially relevant when we make adjustments to our children’s product range and/or when we respond to local and regional changes in the regulatory landscape.

We also have external development relationships that complement our internal R&D capabilities. We manage our R&D activities in collaboration with leading scientists and institutes around the world and we have an active portfolio of projects involving commercial technology suppliers. We believe this approach allows us to be at the forefront of scientific and technological developments relevant for pediatric nutrition. R&D expense was $108.4 million, $115.1 million and $100.2 million in the years ended December 31, 2015, 2014, and 2013, respectively.

Intellectual Property

We own a substantial number of patents and patent applications both in the United States and in other countries of interest to Mead Johnson. Our patent rights relate primarily to ingredients (and combinations thereof) that we use in our products. We augment our portfolio as well by licensing technology from suppliers of a variety of ingredients used in our products. We believe that our patent portfolio is designed such that the expiration of any single patent would not be material to our business. We also hold an extensive portfolio of trademarks across our key geographies. Our trademark rights relate primarily to our Enfa family of brands and other important brands. We file and maintain trademarks in those countries in which we have, or desire to have, a business presence. In addition to patents, licenses and trademark protections, we rely on a combination of security measures, confidentiality policies, contractual arrangements and trade secret laws to protect our proprietary formulas and other valuable trade secrets.

Competition

We compete in two primary categories, infant formula and children’s nutrition. The competitive landscape in each category is similar around the world, as the majority of the large global players are active in these categories. Our main global competitors include Abbott Laboratories, Danone and Nestlé. We have local and regional competitors as well. Other companies, including manufacturers of branded products, private label and store brand products, manufacture and sell one or more products that are similar to those marketed by us. We believe sources of our competitive advantage include nutrition science and innovation behind our products, clinical claims for efficacy and product quality, brand image and associated value, broad sales force and distribution capabilities and consumer satisfaction. Significant expenditures for product development, advertising, promotion and marketing, where permitted, are generally required to achieve acceptance of products among consumers and health care professionals and to support the trend in consumer preferences for premium products in key markets.

Regulatory

We are subject to laws and regulations in each country in which we market our products. We have processes, systems and resources in place to manage compliance with current regulatory requirements and to participate proactively in the shaping of future country, regional and global policy, guidance and regulations. In the United States, infant formula manufacturers are governed by the rules and regulations of the U.S. Food and Drug Administration (“U.S. FDA”) and its Center for Food Safety and Applied Nutrition in connection with the Infant Formula Act of 1980. Outside of the United States, country-specific regulations address compositional criteria, quality criteria, labeling, requirements for placing new formulas on the market and other standards with which manufacturers must comply. Many country-specific requirements are comparable to or will refer to regulations, guidelines and policies promulgated by one or more of the following globally-recognized institutions: the U.S. FDA, the European Commission, the World Health Organization (“WHO”) and, in particular, its International Code of Marketing of Breastmilk Substitutes (the “WHO Code”) and the Codex Alimentarius. It is our policy to comply with all applicable laws and regulations in each country in which we do business.

Environmental, Health and Safety

Our facilities and operations are subject to various environmental, health and safety (“EHS”) laws and regulations in each of the jurisdictions in which we operate. We have programs that are designed to ensure that our operations and facilities meet or exceed standards established by applicable EHS rules and regulations globally. Each of our manufacturing facilities undergoes periodic

4

internal audits relating to EHS requirements and we incur operating and capital costs to enhance our facilities or maintain compliance with applicable requirements on an ongoing basis.

Employees

As of December 31, 2015, we employed approximately 7,660 people worldwide.

Available Information

Our internet website address is www.meadjohnson.com. On our website, we make available, free of charge, our annual, quarterly and current reports, including amendments to such reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the United States Securities and Exchange Commission (the “SEC”). Stockholders and other interested parties may request email notification of the posting of these documents through the section of our website captioned “Investors.” The information on our website is not, and shall not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any other filings we make with the SEC.

Item 1A. RISK FACTORS.

In addition to the other information in this Annual Report on Form 10-K, any of the factors described below could significantly and negatively affect our business, prospects, financial condition or operating results, which could cause the trading price of our securities to decline.

Risks Relating to Our Business

We operate in an intensely competitive business where many factors, including competitive price-based promotional activity, may impact demand for our products.

The infant formula and children’s nutrition business is intensely competitive. Our primary competitors have substantial financial, marketing and other resources. They have diversified portfolio products and may benefit from greater economies of scale due to their size and global footprint. In most product categories, we compete not only with other widely advertised branded products, but also with private label and store brand products that are generally sold at lower prices. We compete based on the following factors: brand recognition and loyalty; product quality; effectiveness of marketing, promotional activity and the ability to identify and satisfy consumer preferences; product innovation; price; distribution and availability of products. In China, continued price-based promotional activity has negatively impacted, and may continue to negatively impact, revenues and demand for our products. Competitive pressures may lead us to reduce product prices. Such pressures may also restrict our ability to increase prices in response to commodity, wage and other cost increases. We may also need to increase spending on marketing, advertising and new product innovation to maintain or increase market share. The success of these initiatives is subject to risk, including uncertainties about trade and consumer acceptance of our efforts, market share loss and inventory levels. If we are unable to compete effectively, our financial condition and operating results may suffer.

Our success depends on our ability to predict, identify and interpret the tastes, dietary habits and nutritional needs of our broad spectrum of global consumers and to offer products that appeal to those preferences (including preferences for super-high premium products). In China, the ongoing shift in consumer demand for fully imported product may continue to negatively impact our locally manufactured brands. Our recently introduced, fully imported product may or may not perform well enough to offset the impact of this shift in consumer demand. Our success also depends on our ability to define the benefits of our products and to effectively communicate these benefits to our consumers. Moreover, our success depends on our ability to effectively identify and accommodate our consumers’ preferred sales channels. If we do not succeed in offering innovative or premium products that consumers want to buy, if we are unable to effectively communicate our product benefits or if we are unable to sell through customers’ preferred channels, our sales and profitability or market share may deteriorate.

Our China operations subject us to risks that could negatively affect our business.

A significant portion of our revenue and profit is derived from operations in China (for purposes of this risk factor, the term China refers to the Company’s businesses in mainland China and Hong Kong). Consequently, our overall financial results are dependent on this market, and our business is exposed to risks there. Our success may be adversely affected by the need to comply with China’s continuously evolving laws and regulations, including those related to trade restrictions, product quality requirements, product labeling rules and advertising regulations. Risks associated with our China operations also include changes in economic conditions (including potential slowdowns in China’s economy, wage and cost inflation, currency exchange rates, consumer spending and employment levels), changes in tax rates, potential tariffs, duties and other trade barriers, increased competitive promotional activity and an ongoing shift in consumer demand for fully imported product through rapidly evolving sales channels. If we are unable to successfully keep pace with changes in consumer product

5

preferences or are unable to successfully access China’s rapidly evolving sales channels (e.g. baby stores and e-commerce channels), our business and financial results may suffer. Moreover, as we adapt to shifting consumer demand for fully imported products and expand direct shipments of such products into China, resulting sales channel shifts may negatively impact our Hong Kong business. See also “We are subject to extensive governmental regulations, and it can be costly to comply with these regulations. Changes in governmental regulations or other policies could harm our business.” There are also uncertainties regarding the interpretation and application of laws and regulations and the enforceability of intellectual property and contract rights in China. There can be no assurance as to the future effect of any such risks and uncertainties on our results of operations, financial condition or cash flows.

Our global operations are subject to political and economic risks of developing countries, and special risks associated with doing business in developing markets.

We operate our business and market our products internationally in more than 50 countries. We focus on increasing our sales and operations in various regions throughout the world, which are less developed, have less stability in legal systems and financial markets, and are potentially more uncertain business environments than the United States, and therefore present greater political, economic and operational risks. We have in place controls, policies and procedures, which include ongoing training of employees with regard to business ethics and many key legal requirements, such as applicable anti-corruption laws (e.g. the United States Foreign Corrupt Practices Act (“FCPA”) and the UK Bribery Act (“UKBA”)). However, there can be no assurance that our employees will adhere to our standards of business conduct and ethics or any of our other policies, applicable anti-corruption laws or other legal requirements. If we fail to enforce our policies and procedures, detect violations in a timely manner or maintain adequate record-keeping and internal accounting practices, we may be subject to regulatory sanctions and suffer damage to our reputation. If we believe or have reason to believe that our employees have or may have violated applicable anti-corruption laws or other laws or regulations, we investigate or have outside counsel investigate the relevant facts and circumstances. If violations are suspected or found, we could face civil and criminal penalties, and significant costs for investigations, litigation, fees, settlements and judgments, which in turn could have a material adverse effect on our business.

We may experience liabilities or negative effects on our reputation as a result of real or perceived quality issues, including product recalls, injuries or other claims.

We may be subject to liability if our products or operations violate, or are alleged to violate, applicable laws or regulations or in the event our products cause, or are alleged to cause, injury, illness or death. Powdered milk products are not sterile. A risk of contamination or deterioration exists at each stage of the production cycle, including the purchase and delivery of raw food materials, the processing and packaging of food products and upon handling and use by health care professionals, hospital personnel and consumers. In the event that our products are found, or are alleged, to have suffered contamination or deterioration, whether or not such products were under our control, our brand reputation and business could be materially adversely affected. Furthermore, whether real or perceived, contamination or spoilage, product mislabeling or product tampering could result in product recalls. No such recalls have been material to our global business. However, a future product recall could be material and have a negative impact on our sales and profitability.

Whether real or perceived, reports of inadequate quality control (with respect to either our products or those of other manufacturers in our segment) could adversely impact our business by contributing to a perceived safety risk throughout the industry. The risk of reputational harm is magnified through rapid, electronic dissemination of information through news reports, social media or otherwise. Federal, state and local governments and municipalities could also propose or pass legislation banning the use of our products.

We are subject to extensive governmental regulations, and it can be costly to comply with these regulations. Changes in governmental regulations or other policies could harm our business.

Our activities are subject to extensive regulation with respect to product manufacturing and labeling, the environment, employee health and safety, hygiene, quality control, advertising, marketing, privacy and tax laws. It can be costly to comply with these regulations. A failure to comply with such laws and regulations could subject us to product recalls, lawsuits, administrative penalties and other remedies. In addition, changes in laws or regulations could further restrict our actions and significantly increase our cost of doing business, causing our results of operations to be adversely affected. For example, government regulations impacting how and where we manufacture or source product (e.g. China’s food safety laws and related regulations) may cause unfavorable cost pressure, a significant change in our geographic earnings mix and/or an adverse effect on the related global tax liability. Barriers or sanctions imposed by countries or international organizations limiting international trade may limit our cross-border activities and sales. Governmental pricing actions may limit our ability to increase, or force us to reduce, prices in various jurisdictions throughout the world. Moreover, regulations, public policy or decisions that restrict marketing, promotion, availability and sale of our products, continued access to health care professionals, product content (including the regulations related to genetically modified organisms), as well as the manufacture and labeling of our products, could have a material adverse impact on our business. Certain advocates and governmental and non-governmental organizations have advocated for more stringent restrictions on the marketing of, and even the sale of, some pediatric nutrition products as well as trademark asset prohibitions and bans on claims for products covering children up to three years of age. Such effort could result in increased governmental restrictions on our activities.

6

Our sales and marketing practices may be challenged by consumers and competitors, which could harm our business.

We participate in a variety of marketing activities, where permitted, including digital, print and television advertising, direct mail, internet and promotional programs. We work with external agencies to create marketing campaigns for consumers, health care professionals and retail sales organizations. Although our marketing is evidence-based and emphasizes our nutritional science, consumers and competitors may challenge, and have challenged, certain of our practices by claiming, among other things, false and misleading advertising. A significant claim or judgment against us could result in monetary damages, limit our ability to maintain current sales and marketing practices and negatively impact our profitability. Even if such claim is unsuccessful or unwarranted, the negative publicity surrounding such assertions could negatively impact our business.

Our significant international operations are subject to extensive risk.

For the year ended December 31, 2015, 73% of our net sales were generated outside of the United States. Our significant international operations are subject to a number of risks related to doing business internationally, any of which could materially harm our business. These risks include:

compliance with anti-corruption regulations (see “Our global operations are subject to political and economic risks of developing countries, and special risks associated with doing business in developing markets.”);

•

trade protection measures and exchange controls;

•

price controls;

•

unauthorized sales of our products through parallel markets;

•

restrictions on the transfer of funds to and from foreign countries, including potentially negative tax consequences;

•

programs intended to discourage the use of our products;

•

differing local product preferences and product requirements;

•

political and economic instability;

•

changes in foreign medical reimbursement policies and programs; and

•

diminished protection of intellectual property.

Our business is subject to the risks inherent in global manufacturing and sourcing activities.

We manufacture and source products and materials on a global scale; therefore, we are subject to risks inherent in these activities such as:

•

raw material, product quality or safety issues, and related shortages or recalls by either us or our third-party suppliers;

•

supply chain disruptions due to weather, natural disaster, fire, terrorism, strikes, various contagious diseases, changes in government regulations or other factors over which we have no control;

•

loss or impairment of key global manufacturing sites or a failure to maintain compliant manufacturing practices at either our sites or third-party manufacturing sites;

•

inability to successfully expand our production and manufacturing capacity due to regulatory or other constraints;

•

limits on manufacturing capabilities due to physical capacity limitations, regulatory requirements, or export / import restrictions associated with the transport of raw goods or material;

•

significant difficulties with the highly exacting and complex processes required to manufacture our products, including equipment malfunction, failure to follow specific protocols and the related need to discard product batches; and

While we have business continuity plans in place for certain manufacturing sites and the supply of raw materials, significant disruption in global manufacturing and sourcing activities for any of the above reasons could interrupt our business and lead to increased costs, lost sales, reputational damage and expense. If not remedied, these factors could have a material adverse effect on our business. Moreover, such significant disruptions may limit our ability to introduce and distribute products, including our existing pipeline of new or improved products, or otherwise take advantage of opportunities in new and existing markets.

7

We are increasingly dependent on information technology. Increased IT security threats could pose a risk to our systems, networks, products, solutions, services and data integrity.

We rely on our information technology, administrative and outsourcing systems (including cloud or partner systems and third-party providers) to effectively manage our business data, communications, supply chain, order entry and fulfillment and other business processes. We also rely on such systems to protect employee and, at times, customer data, including personally identifiable information, which we may collect and retain. These systems may be susceptible to damage or interruption due to system failures, computer viruses, security breaches, telecommunication failures, user error, catastrophic events or other factors. If our information technology, administrative and outsourcing systems suffer severe damage or interruption or intrusion, and our business continuity plans do not effectively resolve the issue in a timely manner, our business could suffer as we could experience business disruption, transaction errors, processing inefficiencies, a loss of customer or employee data and a loss of sales or customers. Moreover, increasing global security threats and more sophisticated and targeted computer crime pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. We invest in security technology to protect our data and business processes against risk of data security breach and cyber attack. There can be no assurance, however, that our efforts will prevent breakdowns or breaches that could adversely affect our business. Such threats, if they materialize, could compromise confidential information or lead to the improper use of our systems and networks, the manipulation and destruction of data, defective products, production downtimes and operational disruptions. If we are unable to prevent security breaches or disclosure of confidential information, we may suffer financial and reputational damage.

Our financial performance measured on a U.S. dollar denominated basis is subject to fluctuations in currency exchange rates. A substantial portion of our sales are outside of the U.S. and the U.S. dollar remains strong in relation to many relevant currencies. These fluctuations could cause material variations in our results of operations, particularly as the U.S. dollar strengthens or does so at an accelerated pace. While we attempt to mitigate some of this risk with hedging and other activities, our business will nevertheless remain subject to substantial foreign exchange risk from foreign currency impacts on our financial statements. Currency rates in some markets, such as Venezuela and Argentina, could impact our results due to high exchange rate volatility, potentially or actually requiring us to apply inflationary accounting. For example, we apply highly inflationary accounting to our business in Venezuela, the impact of which on our consolidated financial statements is dependent upon movements in the exchange rate, including devaluations, between the Bolivares Fuertes and the U.S. dollar. Operating in high inflationary environments could subject us to additional government actions, devaluations and other business restrictions (see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk”).

Moreover, foreign governments may restrict our ability to exchange local currencies for more marketable currencies and may limit our ability to pay dividends, to pay non-local currency accounts payable or to obtain currencies (other than the local currency) which may be more desirable to hold. Foreign governments may simultaneously restrict our ability to increase prices in inflationary environments where local currencies are under significant pressure. Without the ability to increase prices to offset the impact of local currency devaluation, our ability to manage foreign exchange risk may be further limited.

Our current and historical effective tax rate may not be indicative of future rates.

In light of our global earnings mix, our current and historical effective tax rate may not be indicative of future rates due to changes in domestic and international tax laws, changes in our global earnings mix, the need to repatriate future earnings to the United States to satisfy U.S. cash needs, and changes to our tax positions by taxing authorities in the various jurisdictions in which we operate. For example, at the present time, the United States generally taxes a company’s foreign earnings upon the repatriation of such earnings, and these tax rules may change in the foreseeable future. Moreover, given the organization of our business and the locations of our manufacturing operations, cross border transactions among our affiliates are a significant part of the manner in which we operate. Although we believe that we transact intercompany business in accordance with arms-length principles, taxing authorities may not view such transactions as satisfying such arms-length principles and our tax positions may not be upheld by taxing authorities upon audit of our results. Additionally, the base erosion and profit shifting (“BEPS”) project currently being undertaken by the Organization for Economic Cooperation and Development (“OECD”) and the European Commission’s investigations into illegal state aid may result in changes to long-standing tax principles which could adversely impact our effective tax rate.

We rely on third parties to provide us with materials and services in connection with the manufacturing and distribution of our products.

Unaffiliated third-party suppliers provide us with materials necessary for commercial production of our products, including certain key raw materials and primary packaging materials (such as cans). We may be unable to manufacture our products in a timely manner, or at all, if any of our third-party suppliers should cease or interrupt production or otherwise fail to supply us or if the supply agreements are suspended, terminated or otherwise expire without renewal, resulting in a material adverse effect on our business. We also use third-party distributors in many countries throughout the world, including in developing countries. We could experience disruptions that lead to a loss of sales or claims against the Company and irreparable damage to our reputation if any of our third-party distributors either fail to deliver on their commitments in a timely manner or at all (whether due to financial instability, non-compliance with applicable regulations, disruptions in local infrastructure or otherwise) or purport to represent the Company in an unauthorized manner. While we utilize a third-party due diligence process, in light of our global distributor network and the related risks of doing business in developing countries, it is possible that our due

8

diligence process may not successfully identify all relevant risks. See also “Our global operations are subject to political and economic risks of developing countries, and special risks associated with doing business in developing markets.” Moreover, if our distribution agreements are suspended, terminated or otherwise expire without renewal, our sales and profitability could be materially adversely affected.

Our business is particularly vulnerable to commodity price increases in the cost of raw materials used to make our products (e.g. skim milk powder, whole milk powder, lactose and whey protein concentrate), the cost of inputs used to manufacture and ship our products (such as crude oil and energy) and the amount we pay to produce or purchase packaging for our products. Commodity price volatility is caused by conditions such as fluctuating commodities markets, currency fluctuations, availability of supply, weather, consumer demand and changes in governmental agricultural programs. Dairy costs are the largest component of our cost of goods sold. Increases in commodity costs generally impact our gross margins if we are unable to offset such increases by raising prices, changing our product mix or other efforts. Price increases, in turn, could weaken demand for our product. We monitor our exposure to commodity prices as part of our risk management program and attempt to mitigate risk with commodity hedging activities or contractual agreements; however, continued commodity price volatility and ineffective commodity risk management could lead to lower profitability.

Resources devoted to research and development may not yield new products that achieve commercial success.

Our ability to develop new pediatric nutrition products depends on, among other factors, our ability to understand the composition and variation of breast milk and our ability to translate these insights into commercially viable new products. This requires significant investment in research and development and testing of new ingredients, formulas and new production processes. The R&D process is expensive, prolonged and entails considerable uncertainty. Products may appear promising in development but fail to reach market within the expected time frame, or at all. We may face significant challenges with regard to a key product launch. Further, products also may fail to achieve commercial viability. Finally, there is no guarantee that that our development teams will be able to successfully respond to competitive products that could render our products obsolete. Development of a new product, from discovery through testing and registration to initial product launch, typically takes between five and seven years, but may require an even longer timeline. Each of these time periods varies considerably from product to product and country to country. Because of the complexities, uncertainties and cost associated with R&D, products that we are currently developing may not complete the development process or obtain the regulatory approvals required for us to market such products successfully. In addition, new regulations or changes to existing regulations may have a negative effect on innovations in our pipeline, especially late-stage pipeline products.

Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products and brands.

Given the importance of brand recognition to our business, we have invested considerable effort in trademark protection for our brands, including the Enfa family of brands. In addition, we rely on a combination of security measures, confidentiality policies, contractual arrangements and trade secret laws to protect our proprietary formulas and other valuable trade secrets. We also rely on patent, copyright and trademark laws to further protect our intellectual property rights. Uncertainties inherent in enforcing our intellectual property rights make the outcome and associated costs difficult to predict. A failure to obtain or adequately protect intellectual property rights, or any change in law or other change that serves to lessen or remove the current legal protections of our intellectual property, may diminish our competitiveness and could materially harm our business. In addition, some of the countries in which we operate offer less protection for these rights, and may subject these rights to higher risks than is the case in Europe or North America. Despite our efforts to enforce our intellectual property rights on a global basis, counterfeit product or product associated with the illegal use of our intellectual property could cause significant reputational harm.

There can be no assurance that third parties will not assert infringement claims against us or that any infringement claim will not result in costly litigation, substantial damages, the need to refrain from selling our products or the need to obtain a license to use third-party intellectual property (which license we may be unable to obtain on favorable terms, or at all). Even if we prevail against such claims, intellectual property litigation could be costly and time-consuming and could divert the attention of our management and key personnel from our business operations.

If we are not able to successfully implement our productivity program referred to as “Fuel for Growth,” our consolidated results of operations could be negatively affected.

We have implemented a productivity program referred to as “Fuel for Growth” targeting reductions in the Company’s non-advertising and promotional expenses, with emphasis on generating productivity in our external and internal infrastructure costs. While we expect this program to generate significant savings or operating efficiencies over the next three years, there are no assurances that such measures will prove to be successful or that the results we achieve through Fuel for Growth will be consistent with our expectations. We cannot provide assurance that we will realize cost savings, earnings growth or operating efficiencies in connection with Fuel for Growth. As a result, our results of operations could be negatively impacted. Finally, the timing and implementation of these plans require compliance with numerous laws and regulations, including local labor laws, and the failure to comply with such requirements may result in damages, fines and penalties which could adversely affect our business.

9

We derive a significant percentage of our sales from two key customers, the loss of which could negatively impact our business.

Our products are sold principally to distributors and retail customers, both nationally and internationally. Sales to two customers, DKSH International Ltd. (including sales to its regional affiliates) and Wal-Mart Stores, Inc. (including sales to Sam’s Club), accounted for approximately 14% and 12%, respectively, of our gross sales for the year ended December 31, 2015. If either of these customers ceases doing business with us or if we encounter any difficulties in our relationship with either of them, our business could be materially adversely affected.

The consolidation of our retail customers and their reduction of inventory levels may put pressures on our profitability.

Our retail customers, such as mass merchandisers, club stores, baby stores, grocery stores, drug stores and convenience stores, may further consolidate, resulting in fewer customers for our business. Such consolidation produces large retail customers with increased buying power that are more capable of operating with reduced inventories, resisting price increases and demanding price concessions, promotional programs and specifically tailored products. These large customers may also reallocate shelf space to favor their private label or store brand products. Meeting demands from these customers may adversely affect our profitability.

Economic downturns could limit consumer demand for our products.

The willingness of consumers to purchase premium brand pediatric nutrition products depends in part on local economic conditions. In periods of economic uncertainty, consumers may shift their purchases from our higher-priced premium products to lower-priced products or delay having children. During economic downturns, a decrease in the number of working mothers could constrict our customer base, further reducing our sales.

Our growth plan relies on favorable demographic trends in various markets, including birth rates, rising incomes in emerging markets, increasing number of working mothers and increasing consumer global awareness of the importance of pediatric nutrition. If any of these demographic trends change in an adverse way (due to macroeconomic factors, epidemics or other factors beyond our control), our business could be materially impacted. In addition, an adverse change in scientific opinion regarding our products, such as the health benefits of DHA, could materially adversely affect our business.

Changes in the Special Supplemental Nutrition Program for Women, Infants and Children (“WIC”), or our participation in it, could materially adversely affect our business.

The WIC program is a U.S. Department of Agriculture (“USDA”) program created to provide nutritious foods, nutrition education and referrals to health care professionals and other social services to those considered to be at nutritional risk, including low-income pregnant, postpartum and breastfeeding women and infants and children up to age five. It is estimated that approximately 47% of all infants born in the United States during the 12-month period ended December 31, 2015 benefited from the WIC program. The USDA program is administered individually by each state. WIC contracts are generally three years in duration with some contracts providing for extensions; specific contract provisions can vary significantly from state to state. Participation in WIC involves a competitive bidding process and is an important part of our U.S. business based on the volume of infant formula sold under the program. As of December 31, 2015, we held the contracts that supply approximately 44% of WIC births in the United States. Our business strategy includes bidding for new WIC contracts and maintaining current WIC relationships. Our failure to win bids for new contracts pursuant to the WIC program or our inability to maintain current WIC relationships could have a material adverse effect on our business. In addition, any changes to how the WIC program is administered and any changes to the eligibility requirements and/or overall participation in the WIC program could also have a material adverse effect on our business.

Labor disputes may cause work stoppages, strikes and disruptions.

Our manufacturing workforces in Zeeland, Michigan (U.S.); Evansville, Indiana (U.S.); Chonburi, Thailand and Singapore are not unionized. The manufacturing workforces in Guangzhou, China are unionized, but operate without a collective bargaining agreement. The manufacturing workforces in Delicias, Mexico, and São Bernardo do Campo, Brazil, are unionized and covered by collective bargaining agreements that are negotiated annually. The manufacturing workforce and non-supervisory sales force in Makati, Philippines are unionized and covered by a three-year collective bargaining agreement that was renewed effective January 2014. In addition, European Works Councils represent the manufacturing workforce in Nijmegen, the Netherlands, and the commercial organizations in France and Spain. Any labor disputes, including work stoppages, strikes and disruptions, could have a material adverse impact on our business.

Failure to comply with our debt covenants could have an adverse effect on our ability to obtain future financing at competitive rates and/or our ability to refinance our existing indebtedness.

There are various financial covenants and other restrictions in our debt instruments. If we fail to comply with any of these requirements, the related indebtedness could become due and payable prior to its stated maturity and our ability to obtain additional or alternative financing

10

may be adversely affected. Further, we could incur an adverse impact on our effective tax rate if we need to repatriate earnings to the United States in order to repay such debt.

We may not successfully identify or complete acquisitions, joint ventures or other strategic initiatives.

From time to time, we evaluate potential acquisitions, joint ventures and other strategic initiatives. We may consider divesting businesses that do not meet our strategic objectives or growth / profitability targets. We may also consider expanding our product portfolio by adding new product categories. These activities may present financial, managerial, and operational risk including diversion of management’s attention from our existing business, business integration challenges, effective control implementation across a diverse employee population, the failure to achieve anticipated synergies, unanticipated liabilities and potential disputes. These activities may also include inherent risks associated with entering a geographic area which has less political, social or economic stability, less developed infrastructure and legal systems and in which we have no or limited prior operating experience. In addition, we may not be able to complete desirable transactions or initiatives for various financial, regulatory, technological or other reasons. Any of these factors could materially and adversely affect our financial condition and operating results.

Risks Related to Our Relationship with Our Former Parent

If our split-off from BMS fails to qualify for non-recognition of gain and loss, we may in certain circumstances be required to indemnify BMS for any resulting taxes and related expenses.

In connection with our split-off from BMS on December 23, 2009, BMS and its counsel have relied on certain assumptions and representations as to factual matters from us, as well as certain covenants by us regarding the future conduct of our business and other matters, the incorrectness or violation of which could affect the qualification for non-recognition of gain and loss of our split-off from BMS. As a result, we agreed, generally, to indemnify BMS for taxes and certain related expenses resulting from the failure of our split-off from BMS to qualify for non-recognition of gain and loss to the extent attributable to (i) the failure of any of our representations to be true or the breach by us of any of our covenants, (ii) the application of Section 355(e) or Section 355(f) of the Internal Revenue Code to any acquisition of our stock or assets or any of our affiliates or (iii) certain other acts or omissions by us or our affiliates. To the extent we become obligated to make an indemnification payment to BMS through the relevant audit years, we believe that such payment could be material and could have a material adverse effect on our financial condition and operating results.

Item 1B. UNRESOLVED STAFF COMMENTS.

None.

11

Item 2. PROPERTIES.

Our corporate headquarters are located in Glenview, Illinois, where we lease office space. We have committed to a long-term lease obligation related to a planned relocation of our corporate headquarters to Chicago, Illinois in 2017.

We maintain our global supply chain and R&D headquarters in Evansville, Indiana, where we own office, operations and laboratory buildings comprising approximately 1,239,000square feet. We also own or lease the manufacturing facilities identified in the table below. For additional information related to our manufacturing facilities around the world, see “Item 1. Business – Global Supply Chain.” We lease the vast majority of our office facilities worldwide.

The following table illustrates our global manufacturing locations, the approximate square footage of the facilities, the reportable segment served by such locations and whether the facility is owned or leased:

Location

Square Feet

Segment(s) Served

Owned / Leased

Zeeland, Michigan, United States(1)

698,773

All segments

Owned

Evansville, Indiana, United States(1)(2)

458,595

All segments

Owned

Nijmegen, The Netherlands(1)

291,745

All segments

Owned

Delicias, Mexico(1)

134,549

North America / Europe

Latin America

Owned

São Bernardo do Campo, Brazil(1)

64,583

Latin America

Leased

Singapore(1)

466,077

Asia

Owned(3)

Chonburi, Thailand(1)

158,456

Asia

Owned

Guangzhou, China(1)

149,944

Asia

Owned(3)

Makati, Philippines(1)

85,487

Asia

Owned(3)

(1) Powder manufacturing facility.

(2) Liquid manufacturing facility.

(3) The land on which this facility is built is subject to a long-term lease.

Item 3. LEGAL PROCEEDINGS.

In the ordinary course of business, we are subject to lawsuits, investigations, government inquiries and claims, including, but not limited to, product liability claims, advertising disputes and inquiries, consumer fraud suits, other commercial disputes, premises claims and employment and environmental, health and safety matters.

From time to time, we may be responsible under various state, federal and foreign laws, including CERCLA, for certain costs of investigating and/or remediating substances at our current or former sites, and/or at waste disposal or reprocessing facilities operated by third parties. Liability under CERCLA and analogous state or foreign laws may be imposed without regard to knowledge, fault or ownership at the time of the disposal or release. Most of our facilities have a history of production operations in the food and drug industry, and some substances used in such production require proper controls in their storage and disposal. As of December 31, 2015, we were still named as a “potentially responsible party,” or were involved in investigation and remediation, at one third-party disposal site. With regard to such matter, the substantive issues have been resolved, and management believes that any actual or expected additional remediation cost related to such matter, individually or in the aggregate, would be immaterial.

We record accruals for contingencies when it is probable that a liability will be incurred and the loss can be reasonably estimated. Although we cannot predict with certainty the final resolution of lawsuits, investigations and claims asserted against us, we do not believe any currently pending legal proceeding to which we are a party will have a material impact on our business or financial condition, results of operations or cash flows.

Item 4. MINE SAFETY DISCLOSURES.

Not applicable.

12

Executive Officers of the Registrant

Set forth below are the names each of the Company's executive officers and their ages and positions as of February 17, 2016. Also included below is biographical information relating to each of the Company's executive officers. Each of the executive officers is elected by and serves at the pleasure of the board of directors.

Name

Position(s)

Peter Kasper Jakobsen

President and Chief Executive Officer; Director

Michel Cup

Executive Vice President and Chief Financial Officer

Charles M. Urbain

Executive Vice President and Chief Operating Officer

Patrick M. Sheller

Senior Vice President, General Counsel and Secretary

James Jeffrey Jobe

Senior Vice President, Technical Operations

Dirk Hondmann, Ph.D.

Chief Scientific Officer

Graciela Monteagudo

Senior Vice President and President for the Americas and Global Marketing

Christopher R. Stratton

Senior Vice President and President, Asia

Ian E. Ormesher

Senior Vice President, Global Human Resources

James E. Shiah

Senior Vice President and Corporate Controller

Peter Kasper Jakobsen

Age 53

Mr. Jakobsen has been our President and Chief Executive Officer since April 2013, prior to which he served as the Company’s executive vice president and chief operating officer since January 2012. Mr. Jakobsen previously had been our president, Americas from January 2009 through December 2011 and has been employed continuously by Mead Johnson since March 1998 in various capacities. From October 2006 to January 2009, he served as senior vice president, Asia Pacific. From February 2004 to October 2006, Mr. Jakobsen served as vice president, South Asia, and from June 2001 to June 2004, he served as general manager, Philippines.

Michel Cup

Age 46

Mr. Cup has been our Executive Vice President and Chief Financial Officer since September 2015. Before joining the Company, through January 2015, Mr. Cup was the Chief Financial Officer (CFO) of D.E Master Blenders 1753, an international coffee and tea business headquartered in the Netherlands. Prior to joining D.E. Master Blenders 1753, Mr. Cup served as Chief Financial Officer of Provimi from 2010-2011 and as Finance Director of Akzonobel’s Decorative Paints business in Europe from 2009-2010. Mr. Cup has also held senior finance roles in Numico’s Baby and Medical Nutrition business from 1999-2008, including CFO Baby Nutrition Asia Pacific. Mr. Cup began his career with Deloitte where he held various audit and accounting roles from 1993-1999.

Charles M. Urbain

Age 61

Mr. Urbain has been the Company’s Executive Vice President and Chief Operating Officer since September 2015. He previously served as the Interim Chief Financial Officer from March 2015 through August 2015, as well as the serving as the Interim Controller and Treasurer from May 2015 through August 2015. Before holding these positions, Mr. Urbain had served as our Senior Vice President, Stakeholder Relations and Chief Development Officer since January 2012, which role included leadership of the Company's global human resources function. Mr. Urbain previously had been our President, Asia and Europe from January 2009 through December 2011 and has been employed continuously by Mead Johnson or BMS since February 1987 in various capacities. From June 2008 to January 2009, he served as Senior Vice President, North America, Latin America and Europe. From June 2007 to June 2008, Mr. Urbain served as Senior Vice President, North America and Europe. From January 2004 to June 2007, Mr. Urbain served as Senior Vice President, International, and from January 2001 to January 2004, he served as Senior Vice President, Latin America, Canada and Europe. From January 1999 to December 2000, Mr. Urbain served as Chief Financial Officer of the Mead Johnson division of BMS.

Patrick M. Sheller

Age 54

Mr. Sheller has been our Senior Vice President, General Counsel and Secretary since January 2015. Prior to joining the Company, Mr. Sheller served as Senior Vice President, General Counsel, Secretary and Chief Administrative Officer of Eastman Kodak Company (‘‘Kodak’’). He served as Kodak’s General Counsel since 2011, as its Chief Administrative Officer since 2012 and as Secretary to Kodak’s Board of Directors since 2009. In 2011, Mr. Sheller was named Kodak’s Deputy General Counsel, and from 2005 to 2011, he served as their Chief Compliance Officer. Prior to that time, Mr. Sheller held various senior counsel roles with Kodak, including Chief Antitrust Counsel and division counsel to the Health Group and international commercial counsel to the Europe, Africa & Middle East Region. He also held

13

operational roles in Kodak’s Health Group as Director of Strategic Planning and Business Development of the Health Care Information Systems business and Director of Operations for the Health Informatics business.

James Jeffrey Jobe

Age 56

Mr. Jobe has been our Senior Vice President, Technical Operations since October 2014, prior to which time he served as our Senior Vice President, Global Supply Chain since November 2005. Mr. Jobe has been continuously employed by Mead Johnson since 1988. From May 2003 to November 2005, Mr. Jobe served as Senior Director, North America Supply Chain. From March 2000 to May 2003, Mr. Jobe served as Senior Director, International Supply Chain.

Dirk Hondmann, Ph.D.

Age 52

Dr. Hondmann has been our Chief Scientific Officer since October 2014, prior to which time he served as our Senior Vice President, Global Research and Development since joining Mead Johnson in October 2005. From October 2002 to October 2005, Mr. Hondmann served as vice president, research and development of Slimfast, an affiliate of the Unilever Group, an international manufacturer of food, home care, and personal care products.

Graciela Monteagudo

Age 49

Ms. Monteagudo has been our Senior Vice President and President for the Americas and Global Marketing since June 2015. Before assuming this role, Ms. Monteagudo served as the Company’s Senior Vice President and General Manager, North America and Global Marketing from May 2012 to June 2015. Ms. Monteagudo originally joined the Company in 2001, and between 2001 and 2008 served as Vice President, Latin America, and General Manager, Mexico. Outside of Mead Johnson, Ms. Monteagudo served as the Senior Vice President and Business Unit Head for Superama/Sam’s Club at Walmart Mexico from June 2008 to April 2012, after which she rejoined the Company.

Christopher R. Stratton

Age 62

Mr. Stratton has been our Senior Vice President and President, Asia since October 2013. Prior to this time, he served as our Senior Vice President and General Manager, Latin America since May 2010 when he joined the Company. Before joining the Company, Mr. Stratton spent 13 years with EAC/Dumex and Numico managing infant and children nutrition businesses.

Ian E. Ormesher

Age 53

Mr. Ormesher has been our Senior Vice President, Global Human Resources since September 2014. Before joining the Company, Mr. Ormesher served as the Vice President, Human Resources - Western Europe at Carlsberg Breweries A/S from October 2012 to September 2014. From January 2011 to September 2012, he was the Vice President, Human Resources - Asia at Carlsberg Breweries. Prior to that time, Mr. Ormesher spent 12 years with SABMiller, where he served in a variety of HR and organizational development roles of increasing responsibility, including as HR Director of its business in China, and ultimately as its Group Marketing Capability Director from October 2008 to January 2011.

James E. Shiah

Age 56

Mr. Shiah has been our Senior Vice President and Corporate Controller since December 2015, prior to which he served as the Company’s Senior Vice President, Finance since June 2015. Before holding this position, Mr. Shiah served as the Senior Vice President, Chief Accounting and Compliance Officer of Coty Inc. from 2011 to 2014. In this position, Mr. Shiah was the Coty’s principal accounting officer responsible for overseeing various activities including financial reporting, systems of internal control and other compliance programs. Mr. Shiah was Coty’s Senior Vice President Finance and Global Controller from 2006 to 2011 and its Vice President and Corporate Controller from 2001 to 2006. Mr. Shiah began his career at Deloitte & Touche and is a Certified Public Accountant.

Mead Johnson Nutrition Company common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “MJN.” The following table describes the per share range of high and low sales prices, as reported by the NYSE, for shares of our common stock and dividends declared per share of our common stock for the quarterly periods indicated.

Market Price for MJN Common Stock

Dividends Declared Per Share

High

Low

2014

First Quarter

$

85.00

$

73.23

$

0.375

Second Quarter

$

93.43

$

81.23

$

0.375

Third Quarter

$

98.50

$

91.15

$

0.375

Fourth Quarter

$

104.89

$

89.34

$

0.375

2015

First Quarter

$

105.45

$

97.09

$

0.4125

Second Quarter

$

104.34

$

89.26

$

0.4125

Third Quarter

$

91.89

$

69.20

$

0.4125

Fourth Quarter

$

84.49

$

69.31

$

0.4125

Holders of Common Stock

The number of record holders of our common stock at December 31, 2015 was 1,155. The number of record holders is based upon the actual number of holders registered on our books at such date and does not include holders of shares held in “street name” or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depository trust companies.

Issuer Purchases of Equity Securities

The following table includes information about our stock repurchases during the three-month period ended December 31, 2015:

(Dollars in millions, except per share data)

Period

Total Number of

Shares Purchased

(1)

Average Price

Paid per Share

(2)

Total Number of

Shares Purchased

as Part of Publicly

Announced Programs

Approximate Dollar

Value of Shares

that May Yet Be

Purchased Under

the Programs

(3)

October 1, 2015 through October 31, 2015

10,725,552

$

79.25

10,725,552

$

500.4

November 1, 2015 through November 30, 2015

—

—

—

500.4

December 1, 2015 through December 31, 2015

—

—

—

500.4

10,725,552

$

79.25

10,725,552

$

500.4

(1)

On October 22, 2015, the Company announced that, on October 20, 2015, its board of directors approved a new share repurchase authorization of an additional $1,500.0 million of the Company’s common stock (the “2015 Authorization”). Pursuant to the 2015 Authorization, on October 22, 2015, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Goldman, Sachs & Co. (“Goldman”) to repurchase $1,000.0 million (the “Repurchase Price”) of our common stock. Under the terms of the ASR Agreement, 10,725,552 shares of our common stock were received by the Company on October 27, 2015 (which shares are equivalent to approximately 85% of the number of shares of our common stock that could be purchased with an amount of cash equal to the Repurchase Price based on the closing price of our common stock on October 22, 2015). At final settlement, which is expected to occur between March and June 2016, Goldman may be required to deliver additional shares of common stock to the Company, or, under certain circumstances, the Company may be required to deliver shares of our common stock or may elect to make a cash payment to Goldman, based generally on the average of the daily volume-weighted average prices of our common stock during the term of the ASR Agreement, subject, in part, to certain maximum and minimum prices.

15

The total number of shares purchased does not include shares surrendered to the Company to pay the exercise price in connection with the exercise of employee stock options or shares surrendered to the Company to satisfy tax withholding obligations in connection with the exercise of employee stock options or the vesting of restricted stock units and performance share awards.

(2)

The average per share price paid for these shares was determined pursuant to the ASR Agreement.

(3)

On September 11, 2013, the Company announced that its board of directors approved a share repurchase authorization of up to $500.0 million of Company common stock (the “2013 Authorization”). The 2013 Authorization does not have an expiration date. As of December 31, 2015, the Company had $0.4 million remaining available under the 2013 Authorization.

The 2015 Authorization described in Footnote 1, above, does not have an expiration date. On October 22, 2015, the Company entered into the ASR Agreement pursuant to the 2015 Authorization. As of December 31, 2015, the Company had $500 million remaining available under the 2015 Authorization.

Performance Graph

Comparison of Cumulative Total Return

The following graph compares the cumulative total return on an investment in our common stock with the cumulative total return on an investment in each of the Standard & Poor’s 500 (S&P 500) Stock Index and the S&P 500 Packaged Foods Index. The graph assumes that the value of the investment in our common stock and in each index was $100 and that all dividends were reinvested.

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This management’s discussion and analysis of financial condition and results of operations contains forward-looking statements that involve risks and uncertainties. See “Item 1A. Risk Factors” for a discussion of the uncertainties, risks and assumptions associated with those statements. The following discussion should be read in conjunction with our audited financial statements and the notes to our audited financial statements. Our results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those in “Risk Factors.”

Overview of Our Business

We are a global leader in pediatric nutrition. We are committed to being the world’s leading nutrition company for infants and children and to helping nourish the world’s children for the best start in life. Our comprehensive product portfolio addresses a broad range of nutritional needs for infants, children and expectant and nursing mothers. We have over 100 years of innovation experience during which we have developed or improved many breakthrough or category-defining products across our product portfolio. We operate in four geographies which represent our operating segments: Asia, North America, Latin America and Europe. Due to similarities between North America and Europe, we aggregated these two operating segments into one reportable segment. As a result, the Company has three reportable segments: Asia, North America/Europe and Latin America.

Executive Summary

The 2015 results reflect the various challenges that we faced as a global company with a strong presence in emerging markets, especially challenges related to the adverse impacts of foreign exchange. We delivered growth both in price and volume within North America/Europe, but the increases were partially offset by adverse foreign currency translation, notably in Canada. In Latin America, the economic challenges in Venezuela and the devaluation of local currencies, particularly the Mexican peso, negatively impacted our business. Likewise, the weakening of Chinese renminbi had a negative effect on our business in Asia. Price-based promotional activities led to reduced sales in China, Thailand and Malaysia. China and Hong Kong were further impacted by a shift in customer demand to new channels where the Company currently has lower representation. Gross margin benefited from lower dairy costs in each reporting segment. We continued to invest in demand-creation activities and innovation, including the launch of a fully-imported product line in China and high-value product offerings in the U.S. We implemented the Fuel for Growth program during the fourth quarter of 2015 to improve operational efficiencies and reduce costs over the next several years. Earnings Before Interest and Income Taxes (“EBIT”) was lower than it was in 2014; however, as a percentage of sales, EBIT was higher than 2014. Earnings per share in 2015 decreased primarily due to lower sales.

Results of Operations

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

Summary of Results:

% of Net Sales

(Dollars in millions, except per share data)

2015

2014

% Change

2015

2014

Net Sales

$

4,071.3

$

4,409.3

(8

)%

Earnings before Interest and Income Taxes

936.2

988.3

(5

)%

23

%

22

%

Interest Expense—net

65.0

60.3

8

%

2

%

1

%

Earnings before Income Taxes

871.2

928.0

(6

)%

21

%

21

%

Provision for Income Taxes

215.9

199.2

8

%

5

%

5

%

Effective Tax Rate

24.8

%

21.5

%

Net Earnings

655.3

728.8

(10

)%

16

%

17

%

Less: Net Earnings Attributable to Noncontrolling Interests

1.8

9.0

(80

)%

—

%

(1

)%

Net Earnings Attributable to Shareholders

653.5

719.8

(9

)%

16

%

16

%

Weighted-Average Common Shares— Diluted

199.4

202.7

Earnings per Common Share—Diluted

$

3.27

$

3.54

(8

)%

18

The results for the years endedDecember 31, 2015and2014included several items that affected the comparability of our results. These items include significant expenses/(income) not indicative of underlying operating results (“Specified Items”) and are listed in the table below:

Years Ended December 31,

(Dollars in millions)

2015

2014

Restructuring, severance and other related costs

$

28.3

$

1.5

Legal settlements and related costs

13.7

10.3

Pension and other post-employment adjustments

8.2

51.5

Marketable securities gain - net

(5.6

)

—

Specified Items expense/(income)

44.6

63.3

Tax matters and the income tax impact on Specified Items

(11.2

)

(23.7

)

Specified Items after taxes

$

33.4

$

39.6

For the year ended December 31, 2015, Specified Items included charges related to the Company’s business productivity program referred to as “Fuel for Growth” (see “ – Fuel for Growth” below for further discussion), payments made in connection with the SEC settlement disclosed by the Company in July 2015 and a marketable securities gain (see “Item 8. Financial Statements – Note 18. Marketable Securities” for further additional information regarding the marketable securities gain).

Specified Items consistently include the re-measurement of defined benefit pension and post-employment benefit plans. Such re-measurement reflects changes in the pension assets and liabilities above what was estimated and included in periodic costs. Factors beyond our control such as changes in discount rates, market volatility and mortality assumptions drive the re-measurement amount. Additionally, the majority of our pension and post-employment plans are frozen, and, therefore the benefit provided to such employees is not related to our underlying operations. In 2015, the re-measurement loss was driven by returns on plan assets that were lower than anticipated. In 2014, the re-measurement loss was primarily driven by a change in mortality assumptions and discount rate movements.

Net Sales

We recognize revenue net of various sales adjustments to arrive at net sales as reported on the statements of earnings. These adjustments are referred to as gross-to-net sales adjustments. The reconciliation of our gross sales to net sales is as follows:

Years Ended December 31,

% of Gross Sales

(Dollars in millions)

2015

2014

2015

2014

Gross Sales

$

5,411.9

$

5,689.4

100

%

100

%

Gross-to-Net Sales Adjustments

WIC Rebates

763.0

790.0

14

%

14

%

Sales Discounts

320.6

252.4

6

%

4

%

Returns

89.8

86.1

2

%

1

%

Other (including Cash Discounts and Coupons)

167.2

151.6

3

%

3

%

Total Gross-to-Net Sales Adjustments

1,340.6

1,280.1

25

%

22

%

Total Net Sales

$

4,071.3

$

4,409.3

75

%

78

%

The total gross-to-net sales adjustments increased as a percentage of gross sales in 2015 compared with 2014, largely due to price-based promotional activity in 2015 in China.

Our net sales by reportable segment are shown in the table below:

Years Ended December 31,

% Change Due to

(Dollars in millions)

2015

2014

% Change

Volume

Price/Mix

Foreign

Exchange

Asia

$

2,039.0

$

2,278.4

(11

)%

(6

)%

(2

)%

(3

)%

Latin America

757.1

867.5

(13

)%

(4

)%

7

%

(16

)%

North America/Europe

1,275.2

1,263.4

1

%

1

%

3

%

(3

)%

Net Sales

$

4,071.3

$

4,409.3

(8

)%

(3

)%

1

%

(6

)%

19

Years Ended December 31,

(Dollars in millions)

2015

2014

% Change

Infant formula

$

2,407.1

$

2,537.0

(5

)%

Children’s nutrition

1,593.1

1,788.4

(11

)%

Other

71.1

83.9

(15

)%

Net Sales

$

4,071.3

$

4,409.3

(8

)%

Asia sales decreased 11% in 2015 compared to 2014 and accounted for 50% of our net sales. Volume decreased in China as consumer demand shifted to digital purchasing channels and faster-growing imported products in which the Company has historically had lower representation. Increased price-based promotional activity enabled by lower dairy costs and adverse foreign translation also contributed to lower sales in China, Thailand and Malaysia. In the second quarter of 2015, the Company launched a range of fully-imported products in China, available through all channels, which has shown positive results. Sales in the Philippines and Vietnam were higher in 2015 than 2014 primarily as a result of favorable product mix.

Latin America sales decreased 13% in 2015 compared to 2014 and accounted for 19% of our net sales. Foreign currency adversely impacted sales by 16% primarily due to the strengthening of the U.S. dollar against the Mexican peso, Venezuelan bolivar and Brazilian real. Strategic price increases in Argentina and Colombia fully offset sales volume decline of 4% which was due in part to the increase in competition within the milk modifier category in Mexico. Sales volume decline was mainly from intentionally reduced shipments to Venezuela during the latter part of 2015 as a result of the constraints placed by the Venezuelan government on the release of U.S. dollars. Share gains were seen following select strategic investments.

For the year ended December 31, 2015, Venezuela sales represented 1.5% of our total net sales. At this time, we are unable to predict how ongoing developments in Venezuela will affect our sales growth or operations. See “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” for further discussion regarding exchange rate variability in Venezuela.

As discussed above, our results are exposed to adverse foreign currency exchange rates (see “Item 7A. Qualitative and Quantitative Disclosure About Market Risk” for further information). We remain cautious of the impact of such exchange rates on our net sales results because a substantial portion of our sales are outside of the U.S. and the U.S. dollar remains strong in relation to many relevant currencies. We have implemented certain measures to offset some of the impact that lower sales has on our operating margins including cost reduction programs and productivity improvements. However, if the U.S. dollar continues to strengthen or does so at an accelerated pace, we may experience an even greater impact on our business.

Gross Profit

Years Ended December 31,

(Dollars in millions)

2015

2014

% Change

Net Sales

$

4,071.3

$

4,409.3

(8

)%

Cost of Products Sold

1,455.3

1,700.6

(14

)%

Gross Profit

$

2,616.0

$

2,708.7

(3

)%

Gross Margin

64.3

%

61.4

%

In 2015, gross margin percentages benefited primarilyfrom lower dairy costs. Productivity savings were offset by increases in other commodity and production costs.

Operating Expenses

Years Ended December 31,

% of Net Sales

(Dollars in millions)

2015

2014

% Change

2015

2014

Selling, General and Administrative

$

890.6

$

978.9

(9

)%

22

%

22

%

Advertising and Promotion

641.8

638.7

—

%

16

%

14

%

Research and Development

108.4

115.1

(6

)%

3

%

3

%

Other (Income)/Expenses—net

39.0

(12.3

)

n/m*

1

%

—

%

* not meaningful

20

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) decreased 9% in 2015 compared to 2014 primarily due to lower actuarial losses in 2015 related to our defined benefit pension and other post-employment benefit plans compared to prior year. Lower incentive based compensation in 2015 and initial savings from Fuel for Growth also reduced SG&A compared to 2014.

Advertising and Promotion Expenses

Advertising spending includes television, print, digital and other consumer media. Promotion activities include product evaluation and education related materials provided to health care professionals and consumers, where permitted by regulation. Advertising and promotion expenses reflected higher demand-creation investments in support of our strategic growth initiatives including the fully imported products in China and high value product offerings in the U.S.

Research and Development Expenses

R&D activities include continued investment in our innovation capability, product pipeline and quality programs. In addition, R&D expenses decreased due to changes in employee related costs as lower actuarial losses in 2015 related to our defined benefit pension and other post-employment benefit plans compared to 2014.

Other (Income)/Expenses—net

Years Ended December 31,

(Dollars in millions)

2015

2014

Severance and other costs

$

18.0

$

1.3

SEC Settlement

12.0

—

Loss on asset disposals

9.0

—

Foreign exchange losses—net

6.3

0.5

Gain on sale of investment

(5.6

)

(4.0

)

Pension curtailment gain

—

(5.4

)

Other—net

(0.7

)

(4.7

)

Other (income)/expenses—net

$

39.0

$

(12.3

)

In 2015, severance charges were primarily related to Fuel for Growth. Also recognized in other (income)/expenses were payments made in connection with the SEC settlement disclosed by the Company in July 2015 and fixed asset disposal write-offs as we optimize our Asia supply chain strategy. In 2014, we recorded gains related to the revision of a defined benefit plan outside of the United States and the sale of an investment.

Earnings before Interest and Income Taxes

EBIT from our three reportable segments, Asia, Latin America and North America/Europe, is reduced by Corporate and Other expenses. Corporate and Other consists of unallocated global business support activities, including R&D, marketing, supply chain costs, and general and administrative expenses; net actuarial gains and losses related to defined benefit pension and other post-employment benefit plans; and income or expenses incurred within our operating segments that are not reflective of underlying operations and affect the comparability of the operating segments’ results.

Years Ended December 31,

% of Net Sales

(Dollars in millions)

2015

2014

% Change

2015

2014

Asia

$

682.0

$

818.7

(17

)%

33

%

36

%

Latin America

175.2

199.0

(12

)%

23

%

23

%

North America/Europe

361.8

291.0

24

%

28

%

23

%

Corporate and Other

(282.8

)

(320.4

)

12

%

n/a

n/a

EBIT

$

936.2

$

988.3

(5

)%

23

%

22

%

EBIT in Asia decreased 17% primarily due to lower sales in 2015, which were partially offset by lower dairy costs. Additionally, operating costs were higher due to advertising and promotional investments to support the new product launches in China, the establishment of plastic packaging formats across a number of markets and fixed asset write-offs as we optimize the supply chain network in Asia.

Latin America EBIT decreased 12% due to lower sales and investment spending partially offset by an improved gross margin. On a local currency basis, EBIT increased primarily due to lower commodity costs, namely dairy, and improved productivity. This was

21

offset by adverse foreign translation impacts. In addition, 2014 comparably included foreign exchange gains generated from cash received at the official Venezuelan government rate compared to the SICAD rate adopted by the Company in February 2014. See “Item 8. Financial Statements – Note 21. Venezuela Currency Matters” for further information regarding exchange rate variability in Venezuela.

EBIT in North America/Europe increased 24% primarily due to gross margin improvement resulting from both higher realized pricing and lower dairy costs. Demand-creation investments led to increased sales volume. Lower operating expenses were attributable to a lower provision of incentive based compensation. Adverse foreign exchange movements partially offset the increase in EBIT.

Corporate and Other expenses decreased in 2015 compared to 2014 primarily due to lower 2015 actuarial losses related to our defined benefit pension and other post-employment benefit plans, lower incentive compensation and savings from Fuel for Growth, partially offset by Fuel for Growth accruals.

Interest Expense—net

Interest expense-net for the year ended December 31, 2015 increased compared to 2014 primarily as a result of interest expense on the $750.0 million of 3.0% Senior Notes due November 15, 2020 (the “2020 Notes”) and the $750.0 million of 4.125% Senior Notes due November 15, 2025 (the “2025 Notes”), both issued in November 2015. These expenses were partially offset by gains related to fixed to floating rate fair value hedges on both the 2020 Notes and our $700.0 million of 4.90% Notes due November 1, 2019 (the “2019 Notes”).

Income Taxes

The effective tax rate (“ETR”) for the years ended December 31, 2015 and 2014 was 24.8% and 21.5%, respectively. The ETR increase in 2015 was primarily due to unfavorable geographic earnings mix.

Net Earnings Attributable to Noncontrolling Interests

Net earnings attributable to noncontrolling interests consists of approximately 11%, 10% and 10% interest held by third parties in our operating entities in China, Argentina and Indonesia, respectively.

Net Earnings Attributable to Shareholders

Net earnings attributable to shareholders for the year endedDecember 31, 2015decreased9.2%to$653.5 millioncompared with the year endedDecember 31, 2014.

Results of Operations

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

Summary of Results:

% of Net Sales

(Dollars in millions, except per share data)

2014

2013

% Change

2014

2013

Net Sales

$

4,409.3

$

4,200.7

5

%

Earnings before Interest and Income Taxes

988.3

974.9

1

%

22

%

23

%

Interest Expense—net

60.3

50.6

19

%

1

%

1

%

Earnings before Income Taxes

928.0

924.3

—

%

21

%

22

%

Provision for Income Taxes

199.2

235.1

(15

)%

5

%

6

%

Effective Tax Rate

21.5

%

25.4

%

Net Earnings

728.8

689.2

6

%

17

%

16

%

Less: Net Earnings Attributable to Noncontrolling Interests

9.0

5.4

67

%

(1

)%

—

%

Net Earnings Attributable to Shareholders

719.8

683.8

5

%

16

%

16

%

Weighted-Average Common Shares— Diluted

202.7

203.1

Earnings per Common Share—Diluted

$

3.54

$

3.36

5

%

22

The results for the years ended December 31,2014and2013included Specified Items and are listed in the table below:

Years Ended December 31,

(Dollars in millions)

2014

2013

Pension and other post-employment adjustments

$

51.5

$

(12.0

)

Legal settlements and related costs

10.3

9.2

Restructuring, severance and other related costs

1.5

2.6

Administrative penalty (China)

—

33.4

Specified Items

$

63.3

$

33.2

Tax matters and the income tax impact on Specified Items

(23.7

)

1.5

Specified Items attributable to Noncontrolling Interests

—

(3.8

)

Specified Items after taxes

$

39.6

$

30.9

For the year ended December 31, 2014, Specified Items included actuarial losses related to defined benefit pension and other post-employment benefit plans, which were primarily driven by a change in mortality assumptions during 2014 and discount rate movements within each year. In 2013, Specified Items included an administrative penalty in China and actuarial gains related to defined benefit pension and other post-employment benefit plans.

Net Sales

We recognize revenue net of various sales adjustments to arrive at net sales as reported on the statements of earnings. These adjustments are referred to as gross-to-net sales adjustments. The reconciliation of our gross sales to net sales is as follows:

Years Ended December 31,

% of Gross Sales

(Dollars in millions)

2014

2013

2014

2013

Gross Sales

$

5,689.4

$

5,346.6

100

%

100

%

Gross-to-Net Sales Adjustments

WIC Rebates

790.0

702.3

14

%

13

%

Sales Discounts

252.4

215.5

4

%

4

%

Returns

86.1

81.0

1

%

1

%

Other (including Cash Discounts and Coupons)

151.6

147.1

3

%

3

%

Total Gross-to-Net Sales Adjustments

1,280.1

1,145.9

22

%

21

%

Total Net Sales

$

4,409.3

$

4,200.7

78

%

79

%

The total gross-to-net sales adjustments increased as a percentage of gross sales in 2014 compared with 2013, largely due to the addition of new WIC contracts in 2014.

Our net sales by reportable segment are shown in the table below:

Years Ended December 31,

% Change Due to

(Dollars in millions)

2014

2013

% Change

Volume

Price/Mix

Foreign

Exchange

Asia

$

2,278.4

$

2,179.3

5

%

2

%

5

%

(2

)%

Latin America

867.5

861.4

1

%

6

%

10

%

(15

)%

North America/Europe

1,263.4

1,160.0

9

%

7

%

3

%

(1

)%

Net Sales

$

4,409.3

$

4,200.7

5

%

4

%

5

%

(4

)%

Years Ended December 31,

(Dollars in millions)

2014

2013

% Change

Infant formula

$

2,537.0

$

2,459.7

3

%

Children’s nutrition

1,788.4

1,653.3

8

%

Other

83.9

87.7

(4

)%

Net Sales

$

4,409.3

$

4,200.7

5

%

Asia sales increased 5% in 2014 compared to 2013 and accounted for 52% of our net sales. This sales growth was primarily driven by price increases to mitigate higher dairy costs and offset inflation. Sales volume increased due to net category growth for the segment (category growth in certain markets was partially offset by category declines in other markets) and market share gains in certain markets. Segment sales growth was partially offset by the impact of foreign exchange, primarily in southeast Asia. China/Hong Kong’s growth rate slowed in the second half of 2014 compared to 2013 as trade inventory levels in China were reduced in advance of a later 2014 product re-

23

launch. In addition, our growth rate was impacted by a shift in China’s market to faster-growing alternative distribution channels like e-commerce and faster-growing product segments like imports, where the Company has lower market shares.

Latin America sales increased 1% in 2014 compared to 2013 and accounted for 20% of our net sales. Sales volume increased 6%, primarily due to higher sales in Mexico, the Caribbean and Central America. Price increases, predominately in Venezuela and Argentina, were more than offset by adverse foreign exchange movements. For the year ended December 31, 2014, Venezuela sales represented 2.3% of our total net sales.

North America/Europe sales increased 9% in 2014 compared to 2013 and accounted for 28% of our net sales. Volume increases were primarily driven by infant formula market share gains, an expanding U.S. children’s nutrition business and the timing of retailers’ orders. This volume growth was partially offset by the continued decline of category consumption. Price increased throughout the segment.

Gross Profit

Years Ended December 31,

(Dollars in millions)

2014

2013

% Change

Net Sales

$

4,409.3

$

4,200.7

5

%

Cost of Products Sold

1,700.6

1,528.5

11

%

Gross Profit

$

2,708.7

$

2,672.2

1

%

Gross Margin

61.4

%

63.6

%

The decrease in gross margin resulted from higher dairy and manufacturing conversion costs, expenses related to the 2014 opening of our manufacturing facility in Singapore, adverse foreign exchange movements and actuarial losses in 2014 compared to actuarial gains in 2013 related to our pension and other benefit plans, partially offset by increased prices and productivity.

Operating Expenses

Years Ended December 31,

% of Net Sales

(Dollars in millions)

2014

2013

% Change

2014

2013

Selling, General and Administrative

$

978.9

$

903.5

8

%

22

%

22

%

Advertising and Promotion

638.7

645.1

(1

)%

14

%

15

%

Research and Development

115.1

100.2

15

%

3

%

2

%

Other (Income)/Expenses—net

(12.3

)

48.5

(125

)%

—

%

1

%

Selling, General and Administrative Expenses

SG&A increased 8% in 2014 compared to 2013 primarily due to actuarial losses in 2014 compared to actuarial gains in 2013 related to our defined benefit pension and other post-employment benefit plans and inflation, partially offset by the benefit from foreign exchange movements.

Advertising and Promotion Expenses

Advertising spending primarily includes television, print, digital and other consumer media. Promotion activities primarily include product evaluation and education provided to health care professionals and consumers, where permitted by regulation. Advertising and promotion expenses reflected higher demand-creation investments in support of our strategic growth initiatives that were more than offset by the benefit from foreign exchange movements.

Research and Development Expenses

R&D activities include the continued investment in our innovation capability, product pipeline and quality programs. In addition, R&D increased due to actuarial losses in 2014 compared to actuarial gains in 2013 related to our defined benefit pension and other post-employment benefit plans.

24

Other (Income)/Expenses—net

Years Ended December 31,

(Dollars in millions)

2014

2013

Pension curtailment gain

$

(5.4

)

$

—

Gain on sale of investment

(4.0

)

—

Foreign exchange losses—net

0.5

9.3

Administrative penalty (China)

—

33.4

Severance and other costs

1.3

2.2

Other—net

(4.7

)

3.6

Other (income)/expenses—net

$

(12.3

)

$

48.5

For the year endedDecember 31, 2014,other (income)/expenses - netrepresented income of$12.3 millioncompared to an expense of$48.5 millionin 2013. In 2014, we recorded gains related to the revision of a defined benefit plan outside of the United States and the sale of an investment. In 2013, we recorded an expense related to an administrative penalty in China and experienced higher foreign exchange losses.

Earnings before Interest and Income Taxes

EBIT from our three reportable segments, Asia, Latin America and North America/Europe, is reduced by Corporate and Other expenses. Corporate and Other consists of unallocated global business support activities, including R&D, marketing, supply chain costs, and general and administrative expenses; net actuarial gains and losses related to defined benefit pension and other post-employment benefit plans; and income or expenses incurred within our operating segments that are not reflective of underlying operations and affect the comparability of the operating segments’ results.

Years Ended December 31,

% of Net Sales

(Dollars in millions)

2014

2013

% Change

2014

2013

Asia

$

818.7

$

796.2

3

%

36

%

37

%

Latin America

199.0

207.2

(4

)%

23

%

24

%

North America/Europe

291.0

255.0

14

%

23

%

22

%

Corporate and Other

(320.4

)

(283.5

)

(13

)%

n/a

n/a

EBIT

$

988.3

$

974.9

1

%

22

%

23

%

EBIT in Asia increased 3% primarily due to higher sales in 2014 compared to 2013 partially offset by higher dairy input costs, expenses related to the start of our new manufacturing and technology facility in Singapore and adverse foreign exchange movements.

EBIT in Latin America decreased 4% primarily due to higher dairy costs and weaker local currencies, partially offset by foreign exchange gains. In our subsidiary in Venezuela, lower gross profit was partially offset by foreign exchange gains generated from cash received at the official Venezuelan government rate compared to the SICAD I rate adopted by the Company in February 2014. See “Item 8. Financial Statements - Note 21. Venezuela Currency Matters” and “Item 7A, Quantitative and Qualitative Disclosures about Market Risk” for further information regarding exchange rate variability in Venezuela.

EBIT in North America/Europe increased 14% primarily due to higher sales, partially offset by higher demand-creation investments and dairy costs.

Corporate and Other expenses increased in 2014 compared to 2013 primarily due to actuarial losses in 2014 compared to actuarial gains in 2013 related to our defined benefit pension and other post-employment benefit plans despite the nonrecurrence of the 2013 administrative penalty in China.

Interest Expense—net

Interest expense-net for the year ended December 31, 2014 increased compared to 2013 primarily as a result of the incremental and higher interest expense on the $500.0 million of 4.60% Senior Notes due June 1, 2044 (the “2044 Notes”) issued in May 2014 and lower capitalization of interest cost associated with our 2014 opening of the manufacturing and technology facility in Singapore. These expenses were partially offset by gains related to the fixed to floating rate fair value hedges on the $700.0 million of 2019 Notes.

25

Income Taxes

ETR for the years ended December 31, 2014 and 2013 was 21.5% and 25.4%, respectively. The ETR decrease was primarily due to favorable geographic earnings mix, the 2013 administrative penalty in China, which was non-deductible for tax purposes, and the running of the statute of limitations in various jurisdictions during 2014.

Net Earnings Attributable to Noncontrolling Interests

Net earnings attributable to noncontrolling interests consists of approximately 20%, 11% and 10% interest held by third parties in our operating entities in Argentina, China and Indonesia, respectively.

Net Earnings Attributable to Shareholders

For the foregoing reasons, net earnings attributable to shareholders for the year endedDecember 31, 2014increased5%to$719.8 millioncompared with the year endedDecember 31, 2013.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash on hand, cash from operations and available borrowings under our $750.0 million revolving credit facility. Cash flows from operating activities represent the inflow of cash from our customers net of the outflow of cash for raw material purchases, manufacturing, operating expenses, interest and taxes. Cash flows used in investing activities primarily represent capital expenditures for equipment, buildings, acquisitions and computer software. Cash flows used in financing activities primarily represent proceeds and repayments of long-term and short-term borrowings, dividend payments and share repurchases.

Cash and cash equivalents totaled $1,701.4 million at December 31, 2015, of which $1,512.5 million was held outside of the United States. Cash and cash equivalents totaled $1,297.7 million as of December 31, 2014, of which $1,083.8 million was held outside of the United States.

During 2015, we repatriated cash associated with earnings and profits not permanently invested abroad of approximately $59 million to the United States from multiple jurisdictions. During 2014, we repatriated approximately $58 million of cash to the United States from multiple jurisdictions whose earnings and profits are not permanently invested abroad.

As a result of the evaluation of our global cash position, management has asserted that earnings and profits in certain foreign jurisdictions are permanently invested abroad. We will continue to evaluate our global cash position and whether earnings and profits of certain other foreign jurisdictions are permanently invested abroad. The amount of cash associated with permanently invested foreign earnings was approximately $1,124 million and $848 million as of December 31, 2015 and 2014, respectively. Our intent is to invest these earnings in our foreign operations and our current plans do not demonstrate a need to repatriate them to fund our U.S. operations. If we decide at a later date to repatriate these earnings to the United States, we would be required to provide U.S. taxes on these amounts.

The declaration and payment of dividends is at the discretion of our board of directors and depends on many factors, including our financial condition, earnings, legal requirements, restrictions under the terms of our debt agreements and other relevant factors. Cash dividends paid for the years ended December 31, 2015, 2014 and 2013 were $326.0 million, $296.6 millionand$267.7 million, respectively.

Recent Transactions Affecting Our Liquidity and Capital Resources

On October 20, 2015, MJN’s board of directors approved a new share repurchase authorization of an additional $1,500 million of the Company’s common stock.See “ – Share Repurchases,” below.

On October 21, 2015, the Company entered into a $1,000.0 million short-term loan agreement (the “Term Loan Agreement”) with various financial institutions, including Citibank, N.A., as Syndication Agent, and JPMorgan Chase Bank, N.A. (“JPMCB”), as Administrative Agent.See “Item 8. Financial Statements – Note 16. Debt” for additional information.

On October 22, 2015, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Goldman, Sachs & Co. to repurchase $1,000.0 million of our common stock. See “ – Share Repurchases” below.

On November 3, 2015, the Company issued and sold $750.0 million of 2020 Notes and $750.0 million of 2025 Notes. See “ – Long Term Debt” below.

26

On November 3, 2015, the Company voluntarily paid off and terminated the Term Loan Agreement. The payoff amount of $1,000.3 million included principal, accrued and unpaid interest and a facility fee. See “Item 8. Financial Statements – Note 16. Debt” for additional information.

On November 5, 2015, the Company amended its five-year revolving credit facility agreement (the “Revolving Credit Facility”) to, among other things, change the manner of calculating the leverage ratio covenant contained in the Revolving Credit Facility.See “ – Revolving Credit Facility” below.

Cash Flows

We believe that cash on hand, cash from operations, and the available Revolving Credit Facility will be sufficient to support our working capital needs, pay our operating expenses, satisfy debt obligations, fund capital expenditures and make dividend payments.

Years Ended December 31,

(Dollars in millions)

2015

2014

2013

Cash flow provided by/(used in):

Operating Activities

Net Earnings

$

655.3

$

728.8

$

689.2

Depreciation and Amortization

99.1

91.6

83.1

Other

77.8

77.2

53.4

Changes in Assets and Liabilities

167.8

(54.0

)

0.3

Payments for Settlement of Interest Rate Forward Swaps

—

(45.0

)

—

Pension and Other Post-employment Benefits Contributions

(90.1

)

(5.2

)

(19.4

)

Total Operating Activities

909.9

793.4

806.6

Investing Activities

(173.2

)

(182.4

)

(240.5

)

Financing Activities

(286.8

)

(325.5

)

(545.7

)

Effects of Changes in Exchange Rates on Cash and Cash Equivalents

(46.2

)

(38.6

)

(11.7

)

Net Increase in Cash and Cash Equivalents

$

403.7

$

246.9

$

8.7

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014

For the year ended December 31, 2015, cash flow provided by operating activities was $909.9 million and primarily driven by net earnings and increased rebates related to price-based promotional discounting mainly in Asia, as well as increased provisions for restructuring and interest. Such liabilities are expected to settle in 2016. Cash flow from operating activities was reduced in 2015 by an $84.0 million discretionary contribution to the Mead Johnson & Company Retirement Plan in the United States (“U.S. Pension Plan”). For the year ended December 31, 2014, cash flow from operating activities was $793.4 million and primarily driven by net earnings, partially offset by an increase in working capital, defined as accounts receivable plus inventory less accounts payable (excluding capital related items), and $45.0 million of payments related to the settlement of interest rate forward swaps.

Cash flow used in investing activities was $9.2 million less in 2015 compared to 2014. The decrease was largely the result of spending in 2014 related to the Singapore manufacturing and technology facility. Investing activities in 2015 included capacity expansion for manufacturing facilities in the U.S. and our European plant to accommodate demand for new products.

Cash flow used in financing activities was $286.8 million for the year ended December 31, 2015, and included $326.0 million of dividend payments. The net proceeds from the issuance of our 2020 Notes and 2025 Notes and repurchases of Company stock under the 2013 Authorization and 2015 Authorization, discussed below, resulted in a net cash inflow of $50.7 million. Cash flow used in financing activities was $325.5 million for the year ended December 31, 2014, consisting primarily of $296.6 million of dividend payments, $0.6 million repayments of short-term borrowings and $54.1 million of purchases of treasury stock.

Year Ended December 31, 2014 Compared to Year Ended 2013

For the year ended December 31, 2014, cash flow provided by operating activities was $793.4 million and primarily driven by net earnings. Cash flow from operating activities was reduced by an increase in working capital, defined as accounts receivable plus inventory less accounts payable (excluding capital related items), $45.0 million of payments related to the settlement of interest rate forward swaps and higher income taxes paid. For the year ended December 31, 2013, cash flow from operating activities was $806.6 million and primarily driven by net earnings and lower income taxes paid, partially offset by an increase in working capital and contributions to our pension plans. In 2014, cash generated by earnings was higher than 2013; however, outflows related to working capital increases and our settlement of

27

interest rate forward swaps resulted in a reduction of $13.2 million in cash flow provided by operating activities for 2014 when compared to 2013.

Cash flow used in investing activities was $58.1 million less in 2014 compared to 2013. The decrease was largely the result of lower spending for the new Singapore manufacturing and technology facility, which was placed in service during the second and third quarters of 2014.

Cash flow used in financing activities was $325.5 million for the year ended December 31, 2014, and included the $500.0 million redemption of our 3.50% Notes due 2014 (the “2014 Notes”), $296.6 million of dividend payments, $54.1 million of purchases of treasury stock and $7.9 million of withholding taxes on stock-based compensation, partially offset by $492.0 million of net proceeds related to the issuance of our 2044 Notes, after deducting underwriters’ discounts and offering expense, and $46.2 million inflow related to stock-based compensation. Cash flow used in financing activities was $545.7 million for the year ended December 31, 2013, consisting primarily of $267.7 million of dividend payments, $165.4 million repayments of short-term borrowings and $87.1 million of purchases of treasury stock. Cash flow used in financing activities was $220.2 million lower in 2014 compared to 2013 primarily as a result of repayments of short-term borrowings in 2013 and higher treasury stock purchases in 2013.

Capital Expenditures

Capital expenditures and the cash outflow for capital expenditures were as follows:

(Dollars in millions)

Capital expenditures

Cash outflow for capital expenditures

Year ended December 31, 2015

$

179.0

$

173.7

Year ended December 31, 2014

149.0

186.6

Year ended December 31, 2013

251.1

240.4

Capital expenditures in 2015 relate primarily to facilities involved in the manufacturing of fully-imported products for China and the liquid business in the U.S. Capital expenditures in 2014 and 2013 included investments primarily in our spray dryer in Singapore and research and development capabilities which were placed in-service during the second and third quarters of 2014. For 2016, we expect capital expenditures to approach our long-term target of 4% of sales.

Revolving Credit Facility Agreement

During the year ended December 31, 2015, the Company amended its Revolving Credit Facility to, among other things, change the manner of calculating the leverage ratio covenant contained in the Revolving Credit Facility. Previously, such covenant measured consolidated total debt to consolidated Earnings Before Interest, Income Taxes, Depreciation and Amortization (“EBITDA”). Pursuant to the amendment, such covenant will measure consolidated adjusted total debt to consolidated EBITDA, with adjusted total debt determined by reducing total debt by an amount equal to the lesser of (a) $500.0 million or (b) the sum of (i) 100% of the unrestricted cash and cash equivalents of the Company and its domestic consolidated subsidiaries and (ii) 65% of the unrestricted cash and cash equivalents of the Company’s foreign subsidiaries.

The Revolving Credit Facility is unsecured and repayable at maturity in June 2019, subject to annual extensions if a sufficient number of lenders agree. The maximum amount of outstanding borrowings and letters of credit permitted at any one time under the Revolving Credit Facility is $750.0 million, which may be increased from time to time up to $1,000.0 million at the Company’s request, subject to obtaining additional commitments and other customary conditions.

The Revolving Credit Facility contains financial covenants, whereby the ratio of consolidated adjusted total debt to consolidated EBITDA cannot exceed 3.50 to 1.0, and the ratio of consolidated EBITDA to consolidated interest expense cannot be less than 3.0 to 1.0. The Company was in compliance with these financial covenants as of December 31, 2015. Borrowings from the Revolving Credit Facility are used for working capital and other general corporate purposes. During 2015, the Company borrowed approximately $446.0 million under the Revolving Credit Facility primarily to repurchase shares of company stock. The Company repaid these amounts in November 2015. As of December 31, 2015 and 2014, we had no borrowings outstanding under the Revolving Credit Facility. We had $750.0 million available as of December 31, 2015.

Borrowings under the Revolving Credit Facility bear interest at a rate that is determined as a base rate plus a margin. The base rate is either (a) LIBOR for a specified interest period or (b) a floating rate based upon JPMorgan Chase Bank’s prime rate, the Federal Funds rate or LIBOR. The margin is determined by reference to the Company’s credit rating. The margin can range from 0% to 1.375% over the base rate. In addition, the Company incurs an annual 0.125% facility fee on the entire facility commitment of $750.0 million.

In November 2015, the Company issued and sold $750.0 million of 2020 Notes at a public offering price of 99.902% and $750.0 million of 2025 Notes at a public offering price of 99.958%. Net proceeds from the sale of both the 2020 Notes and the 2025 Notes, after deducting underwriters' discounts and offering expenses, were approximately $1,487.7 million. Interest on each of the 2020 Notes and the 2025 Notes is payable semi-annually on May 15 and November 15 of each year, beginning on May 15, 2016.A portion of the net proceeds from the offering of the 2020 Notes and the 2025 Notes was used to repay indebtedness incurred pursuant to the Term Loan Agreement, and the then outstanding borrowings under the Revolving Credit Facility, described above. We intend to use the remainder of the net proceeds for general corporate purposes.

During the year ended December 31, 2015, we also entered into a series of interest rate swaps to convert our 2020 Notes from fixed to floating for the remainder of their term in order to diversify our interest rate exposure. These interest rate swaps have an aggregate notional amount of $750.0 million of outstanding principal. As of December 31, 2015, these swaps were in a loss position with a fair value of $3.5 million.

During the year ended December 31, 2014, the Company issued and sold $500.0 million 2044 Notes at a public offering price of 99.465%. Net proceeds from the sale of the 2044 Notes, after deducting underwriters’ discounts and offering expenses, were $492.0 million. Interest on the 2044 Notes is payable semi-annually on June 1 and December 1 of each year. Proceeds from the 2044 Notes were used to redeem all $500.0 million of our 2014 Notes. The redemption price, which was calculated in accordance with the terms of the 2014 Notes and included principal plus a make-whole premium, was $503.5 million.

In the fourth quarter of 2013, prior to the issuance of our 2044 Notes, we entered into a series of interest rate forward swaps to lock in an interest rate, reflecting then-prevailing rates, in anticipation of the offering. The fair value of these interest rate forward swaps was dependent on the movements in thirty-year interest rates. As a result of a rise in interest rates leading up to December 31, 2013, these interest rate forward swaps were in a gain position with a fair value of $19.4 million as of that date. However, as a result of a subsequent decline in thirty-year interest rates, the fair value of these interest rate swaps declined $64.4 million, resulting in a loss position with a fair value of $45.0 million upon our settlement in May 2014. This $45.0 million is a deferred loss being amortized into interest expense over the life of the 2044 Notes.

During the year ended December 31, 2014, we entered into a series of interest rate swaps to convert our 2019 Notes from fixed to floating for the remainder of their term in order to diversify our interest rate exposure. These interest rate swaps have an aggregate notional amount of $700.0 million of outstanding principal. As of December 31, 2015, these swaps were in a gain position with a fair value of $3.9 million.

Our long-term debt may be prepaid at any time, in whole or in part, at a redemption price equal to the greater of par value or an amount calculated based upon the sum of the present values of the remaining scheduled payments. Upon a change of control, we may be required to repurchase the notes for an amount equalto 101% of the then-outstanding principal amount plus accrued and unpaid interest. Interest on the notes are due semi-annually and the notes are not subject to amortization.

In September 2013, our board of directors approved a share repurchase authorization of up to $500.0 million of our common stock (the “2013 Authorization”). The authorization does not have an expiration date. From the date of such authorization through December 31, 2015, approximately 6.37 million shares were repurchased at an average cost of $78.45 per share.

In October 2015, the Company’s board of directors approved a new share repurchase authorization of an additional $1,500.0 million of our common stock (the “2015 Authorization”).The 2015 Authorization does not have an expiration date. Shares may be repurchased from time to time in the open market transactions or in privately negotiated transactions. On October 22, 2015, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Goldman, Sachs & Co. (“Goldman”) to repurchase $1,000.0 million (the “Repurchase Price”) of our common stock. Under the terms of the ASR Agreement, 10,725,552 shares of our common stock were received by the Company on October 27, 2015 (which shares are equivalent to approximately 85% of the number of shares of our common stock that could be purchased with an amount of cash equal to the Repurchase Price based on the closing price of our common stock on October 22, 2015). At final settlement, which is expected to occur between March and June 2016, Goldman may be required to deliver additional shares of common stock to the Company, or, under certain circumstances, the Company may be required to deliver shares of our common stock or may elect to make a cash payment to Goldman, based generally on the average of the daily volume-weighted average prices of our common stock during the term of the ASR Agreement, subject, in part, to certain maximum and minimum prices.

Fuel for Growth

During the third quarter of 2015, the Company approved a plan to implement a business productivity program referred to as “Fuel for Growth.” Fuel for Growth, expected to be implemented over a three-year period, is designed to improve operating efficiencies and reduce costs by approximately $120.0 million. Fuel for Growth is expected to improve profitability and create additional investments behind brand building and growth initiatives. Fuel for Growth focuses on the optimization of resources within various support functions, integration activities within our supply chain network, and certain third party discretionary costs across the business. The total charges associated with Fuel for Growth in 2015 were $25.1 million. For additional information these charges, see“Item 8. Financial Statements – Note 6. Restructuring.”

Once fully implemented, Fuel for Growth is expected to reduce annual operating expenses by $120.0 million, with a targeted reduction of approximately $60.0 million during 2016. The Company is contemplating additional program activities and anticipates incremental charges in 2016 of approximately $25.0 to $30.0 million. For additional information on the Fuel for Growth program, see“Item 8. Financial Statements – Note 6. Restructuring.”

Contractual Obligations

As ofDecember 31, 2015, our contractual obligations and other commitments were as follows:

Payments due by December 31,

(Dollars in millions)

2016

2017

2018

2019

2020

Thereafter

Total

Operating lease obligations

$

33.1

$

30.1

$

25.7

$

19.7

$

15.0

$

61.4

$

185.0

Capital lease obligations

1.4

0.7

0.3

0.1

—

—

2.5

Purchase obligations

201.8

103.9

89.1

49.8

31.9

77.1

553.6

Short-term borrowings

3.0

—

—

—

—

—

3.0

Long-term debt

—

—

—

700.0

750.0

1,550.0

3,000.0

Interest payments

131.1

128.4

128.4

128.4

94.1

1,031.6

1,642.0

Total

$

370.4

$

263.1

$

243.5

$

898.0

$

891.0

$

2,720.1

$

5,386.1

Our operating lease obligations are generally related to real estate leases for offices, manufacturing-related leases, and vehicle leases. Purchase obligations are for unconditional commitments related to a master service agreement with IBM for information technology, accounting and indirect procurement services; for the purchase of materials used in manufacturing; and for promotional services. The future interest payments include coupon payments on our long-term debt.

Additionally, liabilities for uncertain tax positions, pension and other post-employment benefits and derivative contracts are excluded from the table above as we are unable to reasonably predict the ultimate amount or timing of a cash settlement of such liabilities. See“Item 8. Financial Statements – Note 4. Income Taxes and – Note 8. Employee Benefits” for additional information.

Off-Balance Sheet Arrangements

30

Pursuant to an Amended and Restated Tax Matters Agreement with BMS, we agreed to indemnify BMS for (i) any tax payable with respect to any separate tax return that we are required to file or cause to be filed, (ii) any tax incurred as a result of any gain that may be recognized by a member of the BMS affiliated group with respect to a transfer of certain foreign affiliates by us in preparation for our2009 initial public offeringand (iii) any tax arising from the failure or breach of any representation or covenant made by us which failure or breach results in the intended tax consequences of the split-off transaction not being achieved.

We do not use off-balance sheet derivative financial instruments to hedge or partially hedge interest rate exposure nor do we maintain any other off-balance sheet arrangements for the purpose of credit enhancement, hedging transactions or other financial or investment purposes.

Significant Accounting Estimates

The Company prepared the accompanying consolidated financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). we are required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures.

Estimates are used in revenue recognition, including sales rebate and return accruals, impairment testing of goodwill, income tax assets and liabilities, income tax expense and legal liabilities, as well as the accounting for stock-based compensation and pension and other post-employment benefits, including the actuarial assumptions. Actual results may or may not differ from estimated results. Future results may differ from our estimates under different assumptions or conditions.

We believe that the significant accounting estimates listed below involve our more significant judgments, assumptions and estimates and, therefore, could have the greatest potential impact on our financial statements.

We recognize revenue when substantially all the risks and rewards of ownership have transferred to the customer. Revenue is recognized on the date MJN’s products are received by the purchaser. Revenues are reduced at the time of recognition to reflect expected returns that are estimated based on historical experience and business trends. Additionally, provisions are made at the time of revenue recognition for discounts, WIC rebates and estimated sales allowances based on historical experience, updated for changes in facts and circumstances, as appropriate. Such provisions are recorded as a reduction of revenue. We offer sales incentives to customers and consumers through various programs consisting primarily of customer pricing allowances, merchandising funds and consumer coupons. Provisions are made at the time of revenue recognition for these items based on historical experience, updated for changes in facts and circumstances, as appropriate. Such provisions are recorded as a reduction of revenue.

WIC Rebates—We participate on a competitive bidding basis in nutrition programs sponsored by states, tribal governments, the Commonwealth of Puerto Rico, and U.S. territories for WIC. Under these programs, we reimburse these entities for the difference between our list price and the contract price on eligible products. We account for WIC rebates by establishing an accrual in an amount equal to our estimate of WIC rebate claims attributable to a sale. We determine our estimate of the WIC rebate accrual primarily based on historical experience regarding WIC rebates and current contract prices under the WIC programs. We consider levels of inventory in the distribution channel, new WIC contracts, terminated WIC contracts, changes in existing WIC contracts and WIC participation, and adjust the accrual periodically throughout the year to reflect actual expense. WIC rebate accruals were$205.1 millionand$214.3 millionatDecember 31, 2015and2014, respectively, and are included inaccrued rebates and returnson our balance sheet. Rebates under the WIC program reduced revenues by$763.0 million,$790.0 million, and$702.3 millionin the years endedDecember 31, 2015,2014and2013, respectively.

Sales Returns—We account for sales returns by establishing an accrual in an amount equal to our estimate of sales recorded for which the related products are expected to be returned. We determine our estimate of the sales return accrual primarily based on historical experience regarding sales returns, but also consider other factors that could impact sales returns such as discontinuations and new product introductions. Sales return accruals were$52.6 millionand$47.0 millionatDecember 31, 2015and2014, respectively, and are included inaccrued rebates and returnson our balance sheet. Returns reduced sales by$89.8 million,$86.1 million, and$81.0 millionfor the years endedDecember 31, 2015,2014and2013, respectively.

31

Income Taxes

The ETR reflects statutory tax rates in the various jurisdictions in which we operate, including tax rulings and agreements, management’s assertion that certain foreign earnings and profits are permanently invested abroad and management’s estimate of appropriate reserves against uncertain tax positions. Significant judgment is required in determining the ETR and in evaluating the uncertainty in tax positions.

The provision for income taxes has been determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of our assets and liabilities. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable earnings in effect for the years in which those tax attributes are expected to be recovered or paid, and are adjusted for changes in tax rates and tax laws when changes are enacted. The ultimate liability incurred by us may differ from the provision estimates based on a number of factors, including interpretations of tax laws and the resolution of examinations by the taxing authorities.United States federal income taxes are provided on foreign earnings that are not permanently invested offshore.

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The assessment of whether or not a valuation allowance is required often requires significant judgment including the long-range forecast of future taxable earnings and the evaluation of tax planning initiatives. Adjustments to the deferred tax valuation allowances are made to earnings in the period when such assessments are made.

Changes in uncertain tax positions and changes in valuation allowances could be material to our results of operations for any period, but are not expected to be material to our financial position.

Goodwill

Goodwill is not amortized but is tested for impairment annually and whenever events or changes in circumstances indicate that impairment may have occurred. We utilize a two-step quantitative assessment to test for impairment. The first step involves a comparison of the fair value of a reporting unit with its carrying value. If the carrying value of the reporting unit exceeds its fair value, the second step of the process involves a comparison of the implied fair value and carrying value of the goodwill of that reporting unit. If the carrying value of the goodwill of a reporting unit exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. In evaluating the recoverability of goodwill, it is necessary to estimate the fair value of reporting units, which is generally based on a discounted cash flow model. In making this assessment, the Company relies on a number of factors to discount anticipated future cash flows including operating results, business plans and present value techniques. Growth rates for sales and profits are determined using inputs from our annual planning process. We also make estimates of discount rates, perpetuity growth assumptions and other factors. Many of the factors used in assessing fair value are outside the control of the Company and it is reasonably likely that assumptions and estimates can change in future periods. These changes can result in future impairments. We completed the annual goodwill impairment assessment during the third quarter of 2015, 2014 and 2013 and no impairment of goodwill was required as we determined that the fair values of our reporting units were in excess of respective carrying amounts.

Goodwill recognized as a result of our Argentine acquisition was $68.8 million as of December 31, 2015, which represents a majority of our goodwill balance. Although management currently believes operations in reporting units to which goodwill was allocated can support the value of recorded goodwill, a change in assumptions driven by macro-economic conditions or degradation in the Argentine consumer market that undermines the reporting unit's ability to achieve targeted profit levels may result in an impairment of the recorded goodwill.

Pension and Other Post-employment Benefits

Our pension plans and other post-employment benefit plans are accounted for using actuarial valuations. Management, in consultation with our actuaries, is required to make significant subjective judgments about a number of actuarial assumptions, including discount rates, long-term returns on plan assets, retirement, health care cost trend rates and mortality rates. Depending on the assumptions and estimates used, the pension and other post-employment benefit expense could vary within a range of outcomes and have a material effect on projected benefit obligations. Our key assumptions used in calculating the cost of pension benefits are the discount rate and expected long-term returns on plan assets. Actual results in any given year may differ from those estimated because of economic and other factors.

The discount rate assumptions used to value the pension and other post-employment benefit obligations reflect the yield to maturity of high quality corporate bonds that coincides with the cash flows of the plans’ estimated payouts. In developing the expected rate of return on pension plan assets, we estimate returns for individual asset classes with input from external advisers. We also consider long-term historical returns on the asset classes, the investment mix of plan assets, investment manager performance and projected future returns of the asset classes.

32

During 2015, the SEC staff expressed its acceptance for companies applying an alternative approach for using discount rates to measure the components of net periodic benefit cost for postretirement benefit plan obligations. Specifically, the SEC staff stated that it would not object to companies’ use of an alternative approach that focuses on measuring the service cost and interest cost components of net periodic benefit cost by using individual spot rates derived from a high-quality corporate bond yield curve and matched with separate cash flows for each future year instead of a single weighted-average discount rate approach. Further, the SEC staff stated it would not object to companies treating the change in approach as a change in estimate. We determined it was appropriate to change our estimate in the determination of discount rate assumptions to determine periodic benefit costs for both our defined benefit pension and other postretirement plans.

Our principal pension plan is the U.S. Pension Plan, which is a frozen plan and represents approximately 84% and 73% of our total pension and other post-employment benefit assets and obligations, respectively. The assumptions used to determine net periodic benefit costs for the year are established at the beginning of the plan year and the assumptions used to determine benefit obligation are established as of the balance sheet date.

The key assumptions for theU.S. Pension Planwere as follows:

Used to determine net periodic benefit cost for the years ended December 31,

2015

2014

Discount rate

3.89

%

4.00

%

Expected long-term return on plan assets

6.60

%

7.00

%

Used to determine benefit obligation as of December 31,

2015

2014

Discount rate

4.25

%

3.89

%

The obligation for theU.S. Pension Plan decreased by $75.3 million during 2015, primarily due to the discretionary $84.0 million contribution made by the Company, which was partially offset by declines in asset values.

The following table shows the impact on pension expense of hypothetical changes in the rates assumed for theU.S. Pension Plan: